Brazil’s federal police recently pulled back the curtain on a criminal web that had infiltrated the country’s fuel distribution chains. What looked like ordinary fuel stations were, in fact, outposts of a vast laundering machine, washing dirty money with diesel and ethanol.
According to Justice Minister Ricardo Lewandowski, more than 1,000 service stations across the country were overseen by organised crime syndicates.
The plot thickened when Rio de Janeiro’s state police launched raids against the so-called “fuel mafia”, dismantling a racket that sold millions of liters of adulterated fuel. In the process, they revealed a network of ghost companies churning out fake invoices.
Fuel theft is hardly new to Brazil. The country’s top fuel distributors – Ale, BR, Ipiranga, and Raizen, have warned of criminal infiltration. But the costs of these illegal activities are significant. According to ICL, an industry group, illegal profits generated by gas stations amounted to $23 billion reais($3.89 billion) in 2021.
Organised criminal groups employ multiple strategies to exploit the fuel sector. The most common involves the use of “pirate” gas stations. Outlets that flout safety standards and sell adulterated and stolen fuel.
Another common strategy involves outright theft by installing clandestine taps and siphoning fuel from pipelines. This practice often leads to significant economic losses and poses environmental hazards and public safety risks.
The direct targeting of personnel and infrastructure has also occurred. In 2019, for example, more than 40 people were arrested in Rio de Janeiro in 2019 suspected of extorting and murdering Petrobras contactors
Petrobras has invested in internal compliance, audit mechanisms, and fuel traceability systems to track product movement and prevent insider threats and diversion to illicit markets. The company has also partnered with regulatory agencies like the (National Agency of Petroleum, Natural Gas and Biofuels, or ANP) to tighten oversight over gas stations and transport companies suspected of facilitating the resale of adulterated or stolen fuel.
Original article The rise of Brazil’s fuel mafias and their gas station money laundering machines
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