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HomeEconomyPanel SA: Raízen is convicted of distributing baptized fuel

Panel SA: Raízen is convicted of distributing baptized fuel


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The Federal Court unanimously decided that Raízen (Shell), the fuel arm of businessman Rubens Ometto, will have to pay around R$ 2 million for distributing baptized ethanol to gas stations.

The punishment was applied by the ANP (Agência Nacional do Petróleo) and maintained by the TRF-2 (Regional Federal Court of the Second Region) in what is considered by the agency to be the biggest case of adulteration in the country.

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Raízen is a joint venture between Shell and the Cosan group, from Ometto. The distributor is part of the Instituto Combustível Legal, which has as one of its banners precisely to combat adulteration.

After a series of appeals in an attempt to reverse the ANP’s 2016 decision, the court last week maintained the understanding that the distributor is responsible in the case for not having verified the quality of the alcohol purchased from a plant. The product had a high concentration of methanol, a potentially fatal substance when inhaled.

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The appeal denied on the last 3rd was the last possible appeal by Raízen in the second instance. With the decision, the assessments imposed by the ANP are maintained, when the distributor was fined along with other distributors for not having carried out mandatory tests on the hydrated ethanol purchased before reselling it to gas stations.

In all, Raízen acquired more than 2.9 million liters of adulterated ethanol, according to ANP data. The uncorrected fine is BRL 1.97 million.

In 2016, methanol was added in doses far above those permitted by regulations in hydrated alcohol sold by a plant based in Campos (RJ).

Methanol is a highly toxic substance that gives off vapors from exposure to temperatures of 12 degrees and can kill when inhaled, in addition to causing other serious health damages such as blindness.

In one of the samples analyzed by the ANP, the volume of methanol found was 13.7%, which represents a presence of the substance 27 times above the tolerance limit (0.5%).

According to the Public Ministry of Rio de Janeiro, the substance was added in a premeditated way, which resulted in a criminal complaint, in September of this year, against those responsible for the plant.

In all, the ANP collected around 16 million liters of ethanol from the market – the largest collection ever made by the regulatory agency.

In court, Raízen said that, at the time, it had no obligation to carry out quality tests on ethanol. This claim was refuted by the ANP.

In the process, the agency stated that the obligation of testing by the distributor was already an imposition at that time.

In the judgment on November 3, the Special Body of the Federal Regional Court of the 2nd Region denied Raízen a last appeal, preventing an internal appeal against the decision by the company from going to the higher courts.

“In this case, it matters little whether the appellant intends to commit the infraction or not, the fact is that he failed to comply with the rules of the ANP, which implies strict liability,” said the regulatory agency in a statement presented in March of this year in response to the Raizen’s allegations.

According to federal prosecutor Cristiana Lopes Padilha, who signs the ANP’s statement, Raízen’s arguments, that there was a retroactive application of a rule published only in 2017, are “evidently fallacious”. She reinforces that the obligation to verify the quality of hydrated ethanol was already provided for in the agency’s rules since 2014.

Raízen also mentioned, in its defense, the high “regulatory cost” associated with verifying the quality of purchased fuels. In this regard, the ANP states that “the cost of complying with the legislation” must be part of the “revenue and expense ratio of the company”.

“Furthermore, the annual profit disclosed by the overwhelming majority of liquid fuel distributors, notably by the author, suggests an inconsistency in the thesis that compliance with the legislation would be economically harming this segment of the national fuel supply market”, notes the ANP attorney.

Through its advisory, Raízen said it had filed a lawsuit against the ANP for having been the victim of an action promoted by the fuel supply plant.

The company states that, at the time, the ANP did not require specific tests for the possible presence of methanol in the fuel of plants.

Julio Wiziack (interim) with Paulo Ricardo Martins and Diego Felix

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