Report: Pentagon has amassed billions by overcharging the military for fuel


The Pentagon is being accused of amassing billions of dollars by overcharging the military on fuel.

According to the Washington Post, which broke the story on Saturday, "The Pentagon has generated almost $6 billion over the past seven years by charging the armed forces excessive prices for fuel and has used the money — called the 'bishop's fund' by some critics — to bolster mismanaged or underfunded military programs, documents show."

The report notes that, in the past couple of years, money from this account has gone towards various projects including, "$450 million to shore up a prescription-drug program riddled with fraud and $1.4 billion to cover unanticipated expenses from the war in Afghanistan, according to military accounting records."

Based on standard protocols, the Pentagon's Defense Logistics Agency is in charge of purchasing fuel from major oil companies like Exxon and reselling it to the various military branches and others, notes the Wall Street Journal.

Concerns about the high fuel cost paid by for the armed services have been raised before; a 2014 CNBC report found that the branches end up spending multiple times more than civilians do. However, other factors reportedly figure into the cost, including the challenges in securing and transporting the material.

The Post says that in response to the recent allegations, the Pentagon issued a statement acknowledging that "it accumulated $5.6 billion in 'enterprise gains' from fuel purchases between 2010 and 2016, but said the surplus was the result of falling oil prices in an inherently volatile market."

The scale of fuel consumption by the armed forces is enormous. According to the Union of Concerned Scientists, "The U.S. military is the largest institutional consumer of oil in the world. Every year, our armed forces consume more than 100 million barrels of oil to power ships, vehicles, aircraft, and ground operations—enough for over 4 million trips around the Earth, assuming 25 mpg.