Vitol in African stand-off on $80m oil ‘overcharging’

Vitol, the world’s biggest oil trader, faces a potential scandal over claims it ripped off the people of impoverished Mozambique for critical fuel by at least $80 million (£62 million) last year, the Standard can reveal.

The claims — strenuously denied by Vitol — add further controversy to the largely London-based company. Chief executive Ian Taylor turned down a potential knighthood from outgoing prime minister David Cameron after critical media reports about its dealings with unsavoury regimes.

Vitol is in a standoff with Mozambique’s state-controlled fuel import monopoly Imopetro over claims the company used highly complicated pricing methods to bamboozle the country into overpaying.

Mozambique is one of the poorest countries in the world and affordable fuel is crucial to its attempts to develop its economy.

When a new government came to power last year, it is said to have raised questions about the prices the country was paying Vitol and Imopetro shifted the supply contract to Vitol’s rival Trafigura.

Imopetro is now thought to be demanding Taylor’s company refund it $80 million in alleged excess charges. Vitol counters that Mozambique actually owes it money for breach of contract. If no agreement is reached, senior players at Imopetro are planning to take Vitol to court.

A report this month by CIP, a Mozambique anti-corruption NGO, alleged overcharging for fuel was rife by multinational traders. It claimed illicit profits may have been shared in the past with officials in the country.

Vitol strongly refutes that the CIP allegations reflect its practices. It said it had “zero tolerance” of corruption, that it was upfront about its contracts and had explained the pricing to the Mozambiquans.

Separately, the CIP report claimed Vitol had won extensions to supply contracts in the country twice between 2013 and 2014 despite being eliminated in the tender process after rivals beat them on price. The CIP claimed senior politicians had intervened. Vitol denied any knowledge of this.

An Imopetro document for the supply of unleaded petrol, jet fuel and gasoil (diesel) in 2013 shows Vitol quoting as much as 28% more than Glencore and 32% more than Trafigura. Despite that, Vitol was still chosen to supply the contract.