Defense procurement

Pentagon overbills US military for fuel to pour surplus into ‘slush fund’ – report

The Pentagon overbilled the US Army, Navy, Air Force, and the Marines for fuel, pocketing the massive price differences to fill a “slush fund” used for inefficient or mismanaged defense programs, according to the Washington Post.

The Department of Defense amassed $6 billion over the past seven years by billing the US armed forces excessive prices for fuel, the newspaper reports, citing official documents. The rates were often much higher than those paid by commercial airlines for jet fuel. 

Since World War II, the Department of Defense, which is the largest single consumer of fuel in the world, purchases all of its fuel – around 100 million barrels of refined petroleum annually – and resells it at fixed prices to the Air Force, Navy, Army, and Marine Corps. To procure fuel, each branch of the US military pays for it out of their own budgets.