Misr Petroleum faces a second smuggling scandal in a week following the arrest of seven employees allegedly involved in a petroleum smuggling operation in Sinai.
The former Chairman of Misr Petroleum Yehia Shanan was taken into custody pending charges of smuggling gasoline and diesel through Sinai on Monday. Ahmed Mahmoud Fathallah, the general director of the company’s Suez region was also arrested, along with five employees of the petroleum company.
Shanan and other members of Misr Petroleum were allegedly able to smuggle petroleum to Gaza through illegal tunnels at the Rafah border by setting up a “phantom” gas station in Sinai, selling goods allocated to the nonexistent station to unauthorised recipients. They also allegedly smuggled petroleum through South Sinai and sold it for higher prices to boats in Sharm Al-Sheikh and Taba.
The Suez Director Major of security General Adel Rifaat confirmed that the accused have admitted to the charges, but will be investigated by the governorate before standing trial.
Initial reports indicate that the defendants used the phantom station to obtain millions of litres of petrol with profits of approximately 100 million pounds.
Last week, the Ministry of Supply and Internal Trade discovered that a gas station in Shubra Al-Kheima was being supplied with nearly 3 million litres of fuel per month, six times the 500,000 rationed to stations as per government regulations.
Magdy Wasfy of the Ministry of Supply and Internal Trade said that his department had found that members of Misr Petroleum’s sales and marketing departments colluded with the gas station and supplied it with 90 million litres of gasoline from January 2010 to August 2012. Four individuals are currently being investigated for selling the difference at higher rates than the subsidised prices.
President Mohamed Morsy made it a priority to implement stricter penalties for fuel smugglers and their accomplices in an effort to curb fuel shortages.
Wasfy confirmed that his ministry and the rest of the government have refocused efforts to locate smugglers and those illegally seeking to take advantage of fuel subsidies, admitting that the government needed to act on previous neglect of monitoring fuel sold on the black market.
