‘Fuel retailers selling toxic fuel’

SOME leading fuel retailers in Zimbabwe, purportedly partly owned by Swiss companies, are allegedly importing contaminated diesel which contains high levels of sulphur content for bigger profits, a Swiss corporate watchdog, Public Eye, has warned.

By Elias Mambo

In an investigation report titled How Swiss Traders Flood Africa with Toxic Fuels, the watchdog accuses leading fuel companies of importing toxic fuel.

On Zimbabwe, the report says Sakunda Holdings, Redan Petroleum and Zuva Petroleum, whose majority shareholders are Swiss-based oil giants Glencore and Trafigura, are contributing to the importation of toxic fuels into Zimbabwe.

“For other parts of the report, we also looked at Nigeria, Sierra Leone, Tanzania, Togo and Zimbabwe. With the assistance of a renowned independent laboratory, we analysed the sulphur content as well as other health-damaging substances that can be regularly found in gasoline and diesel sold at African pumps. None of the fuels sampled were even close to the qualities of fuel being sold in Europe,” the report says.

“Indeed, it is an industry in which Swiss trading companies play a decisive role. Having developed into giants, companies such as Vitol, Trafigura, Mercuria, Gunvor and Glencore now own more oil tankers and storage facilities than the oil majors. They not only sell and supply dirty fuels to the African market, but also produce them in search of bigger profit.”

According to the report, the Swiss trading companies Glencore and Trafigura partly own Sakunda, Redan and Zuva through loans they granted to local purchasers of retail networks.

“Glencore used a company called Alveir Management, which it wholly-owned and registered in the British Virgin Islands, to provide a US$22,2 million loan to Woble Investments Ltd, a local company which bought Zuva. Zuva is one of the biggest oil companies in Zimbabwe after acquiring BP and Shell assets in 2010,” the report states.
“Trafigura began its acquisitions in Zimbabwe with a loan. At the end of 2013, it guaranteed a US$120 million loan by French bank Société Générale to Sakunda Holdings.

“In December of the same year, the company bought a 60% stake in Redan Petroleum. A few months later, Trafigura concluded a US$262 million deal to buy 49% of Sakunda Holdings too. With both Redan and Sakunda in its pocket, Trafigura controls more than 125 retail outlets and imports about 50% of the country’s petroleum product needs.”

According to the report, toxic fuel is a health risk because it causes air pollution and “bad air quality in urban areas has become one of the major causes of morbidity and premature death worldwide”.

“By increasing air pollution, high sulphur fuels have direct consequences for public health. In 2012, the World Health Organisation categorised diesel exhaust as carcinogenic, a move that added to the long list of known negative health effects from traffic-related emissions. High sulphur gasoline (petrol) and diesel also destroy emissions control technologies in vehicles.”

The report concludes that “a large majority of the diesel samples contained sulphur levels several hundred times higher than any authorised limit found anywhere between Lisbon and Warsaw”.

However, in an interview with this paper yesterday, Zuva chief executive officer Bethwell Gumbo said the imported fuel is tested before it gets to the market.

“All the fuel is tested at the port in Mozambique before it is sent to the market,” Gumbo said. “I saw that report on the internet but Zuva is not (even) owned by a Swiss company.”

However, Zimbabwe Energy Regulatory Authority (Zera) chief executive Gloria Magombo said the fuel imported into Zimbabwe meets national standards.

“Zera would like to assure the public that fuel imported into Zimbabwe meets current national and regional standards and is not toxic,” she said. “National standard for diesel is ZWS751, which specifies a maximum limit of sulphur content to 500 parts per million.”

The 160-page report said European oil companies, especially Swiss commodity traders, were also exploiting weak African fuel standards by selling toxic diesel and gasoline across the continent.

The investigation concluded that several firms were using an “illegitimate strategy” to boost profits, hawking so-called “African quality” fuels that have had devastating health and environmental impacts across many sub-Saharan states.

Based on research in eight African countries, Public Eye found fuels sold at the pump which contained high levels of toxins, notably sulphur.

Such toxic blends would be illegal to sell in Europe, which caps sulphur rates in fuel at 10 parts per million, Public Eye said.

In Africa, sulphur limits are on average 200 times higher.