Hoy newspaper continues to release information on the lack of controls in place when it comes to Dominican government interests at the Dominican Petroleum Refinery, a 50-50 joint venture between the Dominican government and Shell Company. The newspaper says that results of a new audit indicate that the company did not deliver around RD$1.3 billion to the Dominican state in earnings for operations in 2000, 2001 and 2002. This is up from the RD$227 million figure reported last week in Hoy newspaper.
Reportedly, the unpaid earnings were discovered when the Refinery management, which is controlled by Shell, claimed the refund of part of the resources contributed in 2002. At the time, the Ministry of Finances ordered an audit of the Refinery operations, by expert Ivelisse Mieses, and the results showed that the company had payments due on earnings owed to the government for RD$300 million in 2000, RD$700 million in 2001 and RD$300 million in 2002. But Hoy newspaper explains that those who led the auditing team were removed from their role when the Refinery had only paid RD$130 million on the debt pending for 2002. The report shows that the payment had already been transacted at RD$50 million less, to RD$250 million of the RD$300 million payment. Payments were not made on the previous years covered by the audit.
The newspaper’s sources reveal that the situation created by the audit coincided with the decision of the Finance Ministry team to stop a shipment of fuel that had been imported as if it had been purchased with spot prices, given that the management of the Refinery had not met the requirement of the Law of Hydrocarbons that establishes that the authorities be given a 72 hour notice prior to importing spot market fuel, which is more expensive. The Finance Ministry decision coincided with a rumor that much of the fuel purchased in the DR had been purchased with future contracts, but was being registered as having been purchased on the spot market so that the importer could pocket the price difference.
Economist Arturo Martinez Moya, a former president of the Dominican Petroleum Refinery (1990-93), told Hoy newspaper: “What Shell has failed to deliver to the Dominican state over the years adds up to thousands of millions of pesos that have been kept tumbling around and the audits that have been carried out were stopped for political reasons or for fear of the monster.”
He explained that under the terms of the contract signed with the Dominican government in 1954, the Dominican government only participates in the administration board, practically without a voice or a vote, on the terms set by its partner.
He commented for instance that every week the Ministry of Industry and Commerce announces new fuel prices, indicating that these are set by the government, when in reality they are set by Shell. “Shell sends a document to the Ministry of Industry and Commerce every Thursday saying that fuel cost it so much. Then Industry & Commerce adds on the taxes and the total is what comes out in the announcement of what consumers need to pay for fuel that week,” he explained. But he said that the Ministry of Industry and Commerce has no way of ascertaining what Shell has really spent on fuel. This could be more or less than what Shell reports to the ministry.