Brazilian refinery shipments of petrochemical naphtha to a solvent producer now under criminal investigation have drawn scrutiny after documents and a source close to the case indicated that more than 100 million liters were sold to the firm. The supplier in question, Riograndense - a refinery in southern Brazil backed by Petrobras, Braskem and Ultrapar - appears among the sellers identified in oil regulator ANP records. Prosecutors in São Paulo say the buyer, Petrodansk, diverted that naphtha to gas stations as part of a fuel-smuggling and money-laundering operation believed to be connected to the First Capital Command (PCC), Brazil’s largest criminal gang.
The revelations come at a sensitive moment for Brazil’s energy sector. The United States recently designated the PCC as a Foreign Terrorist Organization, a step that broadens potential penalties for companies that do business with entities linked to the group - though the U.S. designation does not retroactively criminalize activity that occurred before the listing. The unfolding investigation into Petrodansk and its suppliers underscores how commercial relationships in the fuel and petrochemical value chain can create regulatory and enforcement exposure for large market participants.
Transactions and missing chemical marker
ANP records reviewed by Reuters show Riograndense shipped substantial volumes of naphtha to Petrodansk in 2023 and 2024. Of the 139 million liters Riograndense sold to Petrodansk between February 2023 and September 2024, ANP documents indicate 116 million liters were shipped without the chemical marker Brazil requires to detect illegal blending of naphtha with gasoline. The chemical marker enables ANP testing to confirm whether naphtha has been diverted into the fuel distribution chain for blending and sale at retail pumps.
A source close to the investigation told Reuters that, by sending unmarked naphtha, Riograndense effectively made it impossible for regulators to trace whether the solvent was being mixed into gasoline and sold at gas stations. The absence of the regulator-mandated marker therefore obstructed ANP’s ability to detect illicit blends in downstream fuel distribution.
Allegations against Petrodansk and the pattern of diversion
According to a court filing by São Paulo state prosecutors, investigators allege Petrodansk engaged in a "systematic diversion of petrochemical naphtha to gas stations in the Sao Paulo metropolitan region" between June 2023 and May 2026. Prosecutors claim Petrodansk issued counterfeit solvent sales receipts to dozens of shell companies across Brazil while physically shipping naphtha to fuel distributors that blended it with gasoline for retail sale. Investigators say several of the entities listed as buyers do not exist.
In one instance cited by prosecutors, a purported buyer of 4.7 million liters was described as a company without employees and allegedly managed by a convicted drug-trafficker living on welfare in a distant state. Tracking data used by investigators reportedly showed trucks that were recorded as transporting solvent to other states frequently remained within São Paulo, where both Petrodansk and the gas stations under scrutiny are based.
Regulatory and legal ramifications
The case highlights how the energy and petrochemical sectors can be vulnerable points for criminal organizations seeking to launder proceeds through seemingly legitimate commerce. Because naphtha carries a lower tax burden than gasoline in Brazil, mixing it into gasoline increases profit margins for those operating illegally - and can cause mechanical damage to vehicles when improperly blended. Naphtha is also difficult to detect once blended with gasoline unless it carries the regulator’s chemical marker, which is why the ANP requires its use.
U.S. authorities have already moved to curtail financial channels for organized crime. In 2021, the U.S. Office of Foreign Assets Control placed the PCC on a Specially Designated Nationals list, exposing firms to the risk of violating U.S. sanctions where transactions have a U.S. nexus. Legal specialists point out that the terrorist designation expands the U.S. government’s jurisdictional reach and increases the potential for criminal prosecution, civil liability for providing material support, and civil forfeiture of assets.
"Civil forfeiture is a power that the U.S. government regularly exercises," said Matteson Ellis, head of the Latin America practice at Miller & Chevalier. He referenced recent U.S. seizures of ships the government said were carrying precursor materials for meth production, and recalled Washington’s prior actions in closing commercial banks and a brokerage last year over links to Mexican cartels.
Company responses and internal controls
Riograndense acknowledged in a statement that, in 2024, it detected a failure in its marking system. After an internal review, the refinery said the omission of the chemical marker was an unintended operational error, not a deliberate act. Riograndense also said it has since restructured its marking procedures and strengthened due diligence processes. The refinery informed Reuters it stopped selling to Petrodansk in October 2024 after its own due diligence raised potential compliance concerns, though it did not disclose the specific findings.
Riograndense additionally said it has not been notified of any formal investigation by prosecutors. Petrobras and Ultrapar, which are investors in the refinery, emphasized that Riograndense operates independently and that they had received no notification of a probe from São Paulo prosecutors. Braskem did not respond to requests for comment.
Petrodansk did not respond to Reuters requests for comment. In a social media post the company denied any wrongdoing and stated that "at the appropriate time, all clarifications will be provided."
Wider context for the fuel sector
Observers and compliance specialists warn that, in Brazil, the risk of legitimate companies inadvertently transacting with clients tied to the PCC is a present reality. "Unfortunately, in Brazil today the risk of companies inadvertently doing business with clients linked to the PCC is very real," said Ligia Maura Costa, managing director of the Centre for Ethics and Compliance at FGV EAESP Business School.
The fuel sector has long been identified by investigators as a channel in which criminal groups can exploit pricing and tax differentials to generate illicit proceeds. In August, Brazilian prosecutors opened probes into PCC-linked schemes tied to roughly $10 billion of fuel sales, and last month authorities carried out raids targeting fintechs and companies implicated in naphtha-smuggling operations, including Petrodansk, according to court records.
Investigative challenges
Authorities say determining intent in the marking omission by Riograndense will be difficult. A source close to the investigation told Reuters that proving a supplier knowingly shipped unmarked naphtha presents a "great challenge" to investigators. At present, refiners are not formally under investigation - but prosecutors said that could change should evidence arise indicating that Riograndense knowingly supplied unmarked solvent.
The inability of regulators to trace unmarked product complicates enforcement and increases the resources investigators must devote to reconstructing distribution chains and ownership of shipments. The case therefore illuminates both operational vulnerabilities in marking systems and the practical difficulties prosecutors face when attempting to link supply-chain actors to criminal misconduct.
What remains unresolved
Key aspects of the probe remain constrained by what authorities have publicly disclosed and by the limits of the documentary record that has been made available. At this stage, prosecutors have set out allegations against Petrodansk and described patterns they say show systematic diversion and falsified documentation. Riograndense says its lapse was operational and has been addressed internally. Other investors and partners in the refinery say they have not been notified of investigations. Whether investigators can establish intent or broader complicity among suppliers remains an open question.
With the U.S. terrorism designation increasing potential cross-border legal risks for firms that may be exposed to the PCC’s financial networks, the outcome of the São Paulo prosecutors’ work will be closely watched by companies operating across Brazil’s petrochemical and fuel value chains.
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