BY FRANCES ROBLES

  BARRANCABERMEJA, Colombia - Children, the elderly, the barefoot -- the desperate -- trek along the streets of the Nueva Esperanza neighborhood, five-gallon jugs of gasoline on their backs.

  They are dubbed hormigas -- Spanish for the colony of army ants they resemble.

  The people in this Barrancabermeja neighborhood, about 5,000 strong, constitute a thriving business that has saved the town -- the sale of stolen gasoline. Taken from the government's network of pipelines and resold to the community, $90 million a year in gasoline is being siphoned from the state oil refinery and diverted to the coffers of the illegal paramilitary army called the United Self-Defense Forces of Colombia.

  ''Every household is involved,'' said Francisco de Roux, a priest who runs an aid agency here. ``One match, and the entire neighborhood would blow.''

  ''If there were no gas here, there would be no economy,'' added Diego, a political representative of the paramilitary group. ``That pipe is the economy.''

  And for the AUC, as the paramilitary force is called, the theft and resale of gasoline offers a double political benefit -- strengthening its foothold in this contested region as well as providing a source of income apart from trafficking in cocaine.

  The story of stolen gasoline starts a few years ago, when the rebels of the Revolutionary Armed Forces of Colombia, known by the Spanish acronym FARC, controlled Barrancabermeja, a struggling oil town along the banks of the Magdalena River. When FARC rebels declared a labor strike, they would set fire to any taxi whose driver dared to venture onto the street.

  They kidnapped. They killed. They stole gasoline.

  Using valves, drills and hoses, the FARC tapped into the 156 miles of pipeline leaving from Ecopetrol, the state oil company. The pipes go from the country's largest oil

  refinery 150 miles north of the capital to the nation's largest cities, carrying gasoline, diesel fuel and jet fuel. But not all of it gets there.

  The FARC stole about 86,000 barrels a year, using the spoils not just to fuel vehicles but to process cocaine. In the late 1990s, Carlos Castaño, founder of the United Self-Defense Forces, an outlaw army that is the sworn enemy of the FARC, made a promise: He would take back the town whose streets were paved with fuel. He proved as good as his word, and within three months the AUC had won the territory and the lucrative gasoline trade, too, accomplishing a task the Colombian army never achieved.

  There was bloodshed, of course, often the killing of suspected FARC sympathizers who remained behind after the AUC took over. In 2000, Barranca, as it is commonly called here, was the nation's most violent city. In January 2001 alone, 51 people were killed.

  But in a brilliant public relations strategy, the AUC cut the townspeople in on the gasoline trade.

  ''The FARC didn't have vision,'' said Col. Andrés Rodríguez, in charge of a new battalion of the Colombian army that is supposed to fight gasoline theft.

  The AUC has launched an underground economy here that operates in the open. Once it has stolen the gasoline using an intricate web of buried hoses and valves, the paramilitary members sell it back to local families, who resell it at their homes and on street corners.

  The AUC, an organization considered ''terrorist'' by the United States, is a 14,000-strong army blamed for murders and massacres. Now it has become one of
  Barrancabermeja's most important employers. Gasoline that sells for $1.70 a gallon at the pump goes for 90 cents on the black market, or even as little as 60 cents.

  Cars, mopeds and even large trucks wind through the streets of the slum neighborhoods, looking for illegal pumping stations. They are not hard to find. Local children work as hawkers, using special hand signals to lure drivers in need of a fill-up.

  ''Eight!'' shouts one shirtless boy, offering a five-gallon container for 8,000 pesos, about $3. Sensing competition, another child calls out: ``Seven!''

  While the government complains of the theft, the AUC estimates that it supports at least 5,000 poor families. Even service stations are often supplied by the AUC.

  ''Look, natural resources have always been exploited in Colombia,'' said Carlos Ortíz, 26, an engineering student who works full time selling stolen gasoline in front of a wooden shack. ``I'm not embarrassed to say I sell stolen gas. I'm not stealing from the poor.''

  RESENTFUL ATTITUDE

  Ortíz, like most people in Barrancabermeja, deeply resents Ecopetrol for not providing more jobs. Townspeople feel morally justified for swindling a $2 billion industry whose profits are spent elsewhere.

  ''Sometimes I buy the gas for 50 cents a gallon and sell it for $1,'' Ortíz said. ``Who's not going to want that?''

  Drivers are only too willing to take advantage of the savings.

  ''What about when the country steals from the people?'' Alex Ortega asked as he filled up his moped.

  Ecopetrol officials will not speak publicly about the problem but will share statistics. By September, the company had lost two million barrels of gasoline this year, despite the creation of a 1,000-person battalion to stop the practice.

  Last year, it lost 2.1 million barrels. The company is losing an average of 7,732 barrels a day. The number has skyrocketed since 1997, when 98,916 barrels were
  drained the entire year. From 1997 to 2001, the theft increased more than twentyfold.

  Company executives say they can endure 0.5 percent losses annually and remain viable. Ecopetrol is losing 4.5 percent of its refined production.

  NATURE OF PROBLEM

  ''This is not a military problem -- this is a social and economic and political problem,'' Col. Rodríguez said, explaining that many of the town residents were illegal
  squatters lured years ago by the gasoline rush. ``People have no jobs. They don't have money to send their kids to school. They are hungry. Them, I forgive.''

  Although Ecopetrol statistics show that the theft hasn't diminished since the creation of Rodríguez's battalion, the colonel proudly boasts that 230 members of the
  ''gasoline cartel'' have been arrested in 383 operations.

  His team regularly patrols the countryside, looking for illicit valves, but the perpetrators are usually long gone by the time the army gets there.

  ''Here is a $5,000 investment,'' said Maj. Mauricio Moreno, illustrating an elaborate maze of illegal hoses and valves found recently. ``They probably made that back in an hour.''