Diluting Diesel

By Firas al-Taweel

West Bank, Nov,2015: While Palestinian control authorities are consumed in useless arguments on public welfare, and the local judiciary system is handcuffed by none-deterrent punishments, diesel smugglers are creating the right environment for reaping huge fortunes; pumping adulterated solar into public busses and civilian cars.

Last April, Islam Abdallah (psuedo name), driver of a school bus in the Northern West Bank, paid $2,600 to have his bus fixed after its engine stopped working because of adulterated diesel.

Islam is not the first victim of automobile fuel adulteration and will not be the last in The State of Palestine, where the number of busses using diesel stands at 76.996 out of a total of 249.852 busses registered with the Ministry of Transport.

Islam recalled what happened on that 2015 April day his bus broke down while taking students on a school trip after he filled up his vehicle at a nearby petrol station. He had to use another bus in order not to disrupt the trip.

“After that, I drove the broken down bus to Nablus, though with difficulty. I did an electric and mechanical check of the bus, and I was told that the problem is with the fuel used. I was not convinced”.

Five days later, he decided to take the bus to the Palestinian town of al-Khalil (Hebron) for a check-up. “I contacted a mechanic and headed there after midnight. I arrived at 8 am. The drive was far from smooth. The bus kept stopping, and at times, the electrics would suddenly seize to function”. After the mechanic checked it, he said: “The problem is in the diesel pipes”.
Islam added: “The mechanic unscrewed the fuel pipe, got rid of all the fuel and brought clean diesel. All the parts were gradually checked until the problem was identified; all parts related to the fuel pump had been faulty. After the parts were replaced, the bus was functioning back to normal”.

Around the same time Islam’s bus broke down, the General Petroleum Corporation – the Official Palestinian body importing and supervising fuel supplied to petrol station – received five complaints from citizens who reported the breakdown of their busses from adulterated fuel bought from local petrol stations.

This investigative reporter got hold of the results of investigations carried out by the General Petroleum Corporation at Birzeit University laboratory into samples taken from the five stations. The samples showed a lack of compliance with Palestinian fuel specifications.

Based on these tests, the General Petroleum Corporation recommended that the Public Prosecutor investigates the owners of these petrol stations to identify the source of fuel sold as diesel and hold culprits to account.
This investigative report, which lasted six months, showed how several petrol stations operate in the West Bank; mixing diesel with used car lubricants and cheap solvents and re-selling it to consumers, in order to make additional profit.

This takes place amidst weak government supervision because of conflict of interest among the concerned authorities after the passage of ministerial decree no.16/28/10 of April 24, 2014.. Why so? Because the decree identified the General Petroleum Corporation as the body responsible for supervising fuel alongside the Public Authority for the Protection of Consumers at the Ministry of National Economy in the absence of a law that regulates the whole petroleum sector through regular investigation and sample testing.

This reporter got hold of a former worker at a petrol station selling adulterated fuel. In a detailed discussion the latter briefed him on how the process of mixing original fuel with other fluids smuggled to the West Bank from Israel worked.

Yasin (pseudo name), the retired worker, says: “This process used to take place after midnight: The adulterated fuel used to arrive at the station from Israel by smugglers in non-fuel allocated vehicles that looked like sand trucks. Inside every truck was a tank, specially manufactured for this purpose”. The owner of the petrol station would empty the contents of the adulterated petrol from these tanks, onto ground tanks.

“In the morning, the owner of the station would bring another truck full of clean solar, then he would empty it into another ground tank. Then needed amounts will be mixed in a tank. For example, he would mix 5000 liters of adulterated solar with 10,000 liters of pure solar. Then car lubricants would be added to the pure fuel. Sometimes the color of the mixture turns white and at other times yellowish or black” explains Yasin.

Another worker also confirmed to this reporter that the owner of another station in the central part of the West Bank smuggles adulterated solar (diesel) from Israel in plastic containers carried in small trucks. Every two to three days, the fuel would be filled late at night into tanks belonging to the station.

The witness, who did not wish to be identified, clarified: “This is the only petrol station in our town. That is why people are forced to fill their vehicle from it despite the bad reputation it has developed after several vehicles were damaged. The vehicle of a friend of mine, a Skoda 2011, broke down after he left the station. He had to change the fuel pump. The car mechanic informed him that the reason was the fuel used”.

The witness added: “The repeated entry of trucks with plastic containers arose suspicious as the process of filling petrol is usually done via specific known containers and during the day. However, the process at this station is different: A regular truck carrying plastic containers will arrive at dawn and workers would empty the iron containers onto the ground of the station. This is quite strange”.

A third witness said that the owner of another petrol station in the central parts of the West Bank also buys smuggled adulterated fuel from Israel. The fuel is put inside plastic containers and loaded onto small trucks that would arrive at the station at night every two or three days.

Since the official price of a liter of solar in Palestinian markets is five Shekels ($1.3) the profit attained illegally (via smuggling) becomes 1.7 Shekels ($0.43). Assuming the mixing is calculated on the basis of one liter of adulterated fuel to two liters of pure fuel, as per the stories of the witnesses, the then the mixing of 100,000 liters of adulterated fuel would make a profit of 170,000 Shekels ($44,155.)

The reporter headed to Ahmed Mehanna, mechanical engineer at “al-Rami Motors”, the official agents of Ford cars in “Palestine” who supply the West Bank with 40% of vehicles used by public transport according to figures provided by the Ministry of Transport.

Mehanna, head of the maintenance division at the company, said: “We do not need to send solar to labs in order to confirm that it is adulterated. Simply, by opening the solar filter that is attached to the engine, we will empty all the contents in an empty glass, at which point you and I can see that the color is blackish contrary to that of pure fuel”.

Mehanna explained: “Because adulterated fuel is getting into the engine of vehicles, the advanced system for automatic pumping of solar into them no longer functions. Within one or two years, the engine would need to be fixed or even replaced. Any particles or traces of water found in the solar pumps cause damage to the minor and/or main pumps. This leads to an increase in fuel consumption and a sudden halt in the engine every now and then. In addition, it weakens the engines and causes disruption when driving”.

Though the General Petroleum Corporation and the Public Division of Consumer Protection at the Ministry of National Economy should supervise the sale of fuel, at least in theory, both do not have accurate figures regarding the extent to which the adulterated fuel has spread in the West Bank.

According to Mr. Fouad al-Shobki- General Manger of the General Petroleum Corporation, “The latter part of 2015, witnessed great improvement after the Ministerial Decree was issued; a number of procedures related to supervision were taken and as a result four stations were closed down”.

Ms. Fidaa Mashaal, Director of Supervision and Quality Control at the Corporation said: “Prior to 2013, the phenomenon of adulterating solar was widely spread. However, after the general attorney looked into a number of complaints related to that, the phenomenon began to decrease. In 2015, the situation diminished greatly compared to before”.

However, she said that even if one station sells adulterated fuel it will affect tens or hundreds of cars a day.

Complicating matters further is lack of a program to carry out thorough investigation of and supervision on the West Bank 230 licensed petrol stations and 10 others that are not licensed as they are not in areas classified as “C” – land controlled by the Palestine National Authority in line with the 1993 Oslo agreement between Israel and the PLO.

To get an idea on how widespread automobile fuel adulteration is in the West Bank, this reporter had to visit Mr. Mehanna at the Ford vehicle maintenance center for a second time. He confirmed that 10% of the 100 Ford “Transit” vehicles that are checked into the center each month “have problems due to poor solar quality. He added: “The issue lies in the quality of the solar. We have been instructed by the producer to change the solar filter every 30,000 km. However, we change these filters every 15,000 km in order to avoid damaging the pump which could cause the engine to break down.

Ammar al-Hadmi, director of the maintenance at the Palestinian-Arab Vehicle Company (agents of Hyundai), says the center receives no less than 175 diesel-run vehicles every month. “A third of them have problems due to poor quality solar. Fixing those problems can cost between $500 and $3000, depending on the type of damage caused”.

In 2014, the General Petroleum Corporation tested 83 samples taken at random from 36% of gas stations over 12 months. Fifty six of them failed the test. In the first 8 months of 2015, the same tests were run on 80 petrol stations, but only 21 failed.

The Palestinian General Petroleum Corporation does not follow a strict schedule or inspection plan over petrol stations because instructions in the Ministerial Decree of 2014 do not force the supervisory body to undergo regular inspection.

There are no laws regulating the petroleum sector, this investigative reporter has concluded. That’s why the General Petroleum Corporation takes action only after citizens submit complaints or when fraud cases are discovered by the Protective Security Authorities or the Customs Department.

However, the Corporation tests all fuel imported from Israel, weekly, before selling it to the stations (the Palestine National Authority imports 100% its petrol from Israel).

Following the Ministerial Decree of 2014, the Customs Department was named as the official authority responsible for countering smuggling and tax evasion related to the petroleum sector. Between April 2014 and August 2015, the Customs Department had nabbed 85,000 liters of smuggled and mixed solar coming from Israel to the West Bank. Customs officials rely mostly on prior notifications or warnings. The customs are unable to cover all areas of operations as they only have 370 personnel distributed between offices and in the field. They work on shift-basis in pursuit of a wide-range of smugglers; food, settlements products, petroleum etc., according to General Lotfi Naser, Director of Supervision and Combating Smuggling at the Customs Department.

The situation of staffing at the General Petroleum Corporation is no better than that of the Customs Department. The Corporation’s Supervision and Quality Control Department has two employees – the director and an assistant. According to Eng. Fidaa Mashaal, the department has to rely on 30 employees of the Corporation working at its offices in all Palestinian governorates when it needs to inspect petrol stations and collect fuel samples.

“Our supervision would be more effective if we had enough staff”, she said. Unfortunately, having the General Petroleum Corporation operate under the umbrella of the Ministry of Finance has affected our work as the ministry is only interested in collecting taxes. “The supervisory sector is not a priority for them”.

The General Petroleum Corporation distributes 40 million liters of solar and 20 million liters of fuel every month, generating an annual tax revenue of 2.4 billion Shekels ($615 million).

The Consumer Protection Division at the National Economy Ministry is manned by 61 employees including administrative staff. Mr. Ibrahim al-Qadi, General Manger of the Division, said: “Most of our staff’s academic and professional background is in chemicals and nutrition… We have no fuel specialists”. Hence, his department seeks the help of the department of regulations and specifications and the General Petroleum Corporation in order to fill the gap in numbers and expertise”.

The General Petroleum Corporation was the only expert authority on the supervision of fuel quality in the Palestinian market from 1994 until the Decree of 2014 allocating the responsibility of this sector to the Ministry of National Economy’s division of Consumer Protection and the General Petroleum Corporation .

After this journalist interviewed all supervisory sides identified in the Ministerial Decree, he concluded that this decree has no chances of implementation due to the inability of both parties to liaise between each other let alone agree on one meaning for the concept of supervision on the petroleum sector.

The General Petroleum Corporation believes that staff at the division for the protection of consumers is in charge of supervision. The latter says the Corporation is unable to implement full supervision on petrol and other fuel supplies as it is unable to inspect the petrol stations that are not licensed.

Illegal stations should be closed down while the rest of stations should be notified that they are under constant supervision and that samples will be collected randomly form each one in line with an annual program. These samples should be obtained at night when the mixing process takes place, not during the day.

The General Petroleum Corporation does not follow such procedures and says that the main issue lies in closing down the unlicensed stations, not inspecting them. However, since those stations are located in areas that do not fall under the control of the Palestinian National Authority, closing them down is difficult.

In the realm of these contradictions, the previous head of the High Judicial Council, Mr. Eisa Abu Sharara, recommended that the two supervisory authorities fall under one independent body. He also recommended a revision of the Penal Code to provide a deterrent in addition to issuing an independent law to regulate the fuel sector.

In March 2015, the reporter asked the “Consumer Protection” to accompany their staff on a field tour of stations in the suburbs of Jerusalem – which is considered outside the security control of the Palestine National Authority, to learn about supervision procedures. He was told that staff from the Consumer Protection and the standards and specification department will do the tour without a representative from the General Petroleum Corporation.

In this tour, two samples were taken from two licensed stations. At the third station, which is unlicensed, the owner refused to allow the staff to obtain a sample and tried to stop the reporter from filming. The team decided to ask for help from the “Protective Security” to be able to collect the sample. It is worth noting that by the time of the publication of this investigation, the petrol station at stake remained open because it does not fall under the control of the Palestine National Authority, says Fouad al-Shobki, director of the General Petroleum Corporation.

And the lab results of samples taken from the other two stations showed that they did not comply with the petrol specifications. Their files were transferred to the Judiciary court.

The lack of a law regulating the task of the General Petroleum Corporation to contain crimes in this sector is considered one of the main obstacles, according to Mr. Azzam Tawaafsheh, the prosecutor in charge of economic crimes. He added that the “Petroleum products are of grave importance to the state as it is a major source of income. The law should identify legal measures to be taken against such crimes as these punishments are lacking. In addition, it is necessary to have specialized labs working under the General Petroleum Corporation”.

Since 2008, the Palestinian courts have looked into seven cases of adulterated diesel at stations in the West Bank. Two of these cases were dismissed in 2008 and 2009 and the rest are pending, according to the register of Palestinian courts.

This shows that up until the creation of a specialized economic crime court in 2014, the legal procedures for the transfer of petrol adulteration crimes to regular courts took years.

This investigation was completed with support of Arab Reporters for Investigative Journalism (ARIJ) – www.arij.net – and coached by  Hisham Abdullah.