Organized crime a threat to Brazil’s fuel market, says lawmaker

The infiltration of organized crime into Brazil’s fuel market poses a threat to the country's logistics and supply chain, according to federal lawmaker Júlio Lopes of the PP party in Rio de Janeiro state. 

In a letter recently sent to local oil and gas regulator ANP, the lawmaker urged it to speed up work to deploy a system for online monitoring of fuel stocks and handling to prevent fraud. 

He expressed concern about suspicions involving the activities of fuel formulators, refiners, importers, distributors, transporters and resellers that mostly operate in São Paulo state and that now intend to enter the Rio de Janeiro market. 

According to Lopes, these firms are "known for circumventing inspections by regulatory bodies, evading millions of reais in taxes in the fuel market and for their connections to São Paulo's main criminal organization, the PCC [Primeiro Comando da Capital]."

Lopes also underscored that, in addition to money laundering and other criminal activities, groups such as the PCC also use trading companies, and maritime and road transportation companies for international drug trafficking operations. 

In Rio de Janeiro, local gangs also use the fuel chain for money laundering and fraud.

He warned that neighboring countries like Colombia and Venezuela are already facing the effects of organized crime's domination of the fuel sector, with significant impacts on the economy and security. 

Lopes said that until an automated fuel monitoring system is implemented, this type of situation will continue to worsen, with an increase in fraud, a decrease in the quality of fuel offered to Brazilian consumers and higher tax evasion.

The ANP’s press office told BNamericas that it has received the letter and is studying it before making a response to the lawmaker.

NEW BILL

Júlio Lopes recently presented a bill in the lower house to create the electronic fuel sector information system (SEISC), which would be implemented and operated by the national fuel system operator (ONSC) – similar to the national power grid operator (ONS).

The ONSC would be set up like a privately-funded public entity and run jointly with the government. It would be the responsibility of both the mines and energy (MME) and justice ministries in order to constitute the national public security fund. 

Other measures to combat organized crime include authorization for the federal revenue service to suspend the national registration (CNPJ) of companies linked to illicit and/or criminal activities, as well as for the ANP to revoke authorizations and permits for these companies. 

AMAZON PIRACY

Meanwhile, Brazil continues to face serious fuel theft in the Amazon region.

A survey by Instituto Combustível Legal (ICL) indicates that the activities of river pirates, criminals who steal fuel transported via waterways in the north of the country, cause annual losses of around 100mn reais in cargo transportation activities.