Petromol in Bulgaria cooperates with Russia and evades taxes in Ukraine: investigation

The Google map shows that there are about 15 Petromol petrol stations in the Odesa region, mostly in the south and near Odesa, with a few more on the way to still-controlled-by-Russia Transnistria. These petrol stations offer fuel below market prices, but for cash only. Center of Public Investigations journalists explored the situation.

Petromol has repeatedly been involved in high-profile scandals: the design of its petrol stations resembles another well-known chain, the company does not pay taxes, and it sometimes builds its facilities without permits. However, the chain is still pretty much alive and keeps selling excisable goods without accounting records. Moreover, its owners seem to have businesses abroad, and it cooperates with Russia during the full-scale war.

Did they steal the design of an international chain?

According to the Nafto-Rynok publication, on 2 July 2019, the construction of a Petromol station complex on the Odesa-Kyiv highway was nearing completion. However, the complex design was very similar to that of another international petrol station chain, Rompetrol, which had de facto ceased operations in Ukraine at the time.

Currently, the media provides little information about the scandal over the allegedly "stolen" design. This is not surprising, given that one of the parties to the dispute has left the Ukrainian market and gone bankrupt, while the other has neither an official website nor a registered trademark. However, in 2021, enkorr reported that the international Rompetrol concern accused Petromol of illegally using its corporate identity elements.
In 2014, Rompetrol registered an image of its company's trademark in Ukraine. The mark is suspiciously similar to the one currently used by Petromol petrol stations.

According to the Trademark Register, the trademark of the international concern Rompetrol is still registered for this company, even though it no longer operates in our market.

The design of Petromol petrol stations chain. Photo by CPI

At the same time, neither Petromol’s brand name nor trademark is reflected in the Register, and searching for the company's official website on the Internet produces no results.

Cash only

A Ukrainian review website shows that the Petromol chain received a low score of 2 out of 5. Besides complaints about poor quality fuel, consumers mostly complain about the lack of cashless payment options, as employees only require cash.

Almost every petrol station in the chain marked on Google Maps features such complaints. The same situation is typical for Petromol stations operating in Moldova. For example, one of the customers at the petrol station in the neighbourhood of the Moldovan village of Congaz commented a month ago that they could only pay cash.

We could see first-hand that the chain's petrol stations operated only cash-based when we visited two complexes near Odesa. The petrol station attendants immediately warned us that cashless payments were not possible. There was no cash register at the petrol stations, nor were we given receipts. The staff of the complex comprises one employee only. At the same time, the petrol station is not short of customers as the fuel price is below the market price. For example, diesel fuel costs under UAH 45 per litre (about 1,1 Euro). According to the Ministry of Finance, this is the lowest price in Ukraine. 

The lack of cashless payments at petrol stations may indicate that the chain sells excisable goods, including fuel, without proper documentation, which violates the law. It is unknown where the suppliers get the fuel from, what quality it is, and whether they pay taxes for each litre sold.

"There are several violations at once. The oil and lubricants supply is based solely on the issuance of payment documents, meaning fiscal receipts. Even licensing to sell petroleum products requires registration of the payment transactions registrar," explains Yuriy Holosov, attorney-at-law at Nikitinsky & Partners.

According to the lawyer, petrol stations can be inspected by the State Tax Service, the police, the Economic Security Bureau, and the State Service of Ukraine on Food Safety and Consumer Protection. Moreover, the fines for violations when there is a lack of proper payment documents are quite high: 150% of the amount in the first incidence and 200% in the second one. Fines for improper accounting of petroleum products are even higher, equalling the cost of petroleum products: "If a particular petrol station has not properly documented a tanker or licensed warehouse, it will be fined the value of all the fuel detected at that petrol station. In fact, petrol stations have very complex and multi-level accounting for the receipt, sale, and posting of petroleum products... In the State Register of Court Decisions, we can see the many millions of fines for such violations, usually exposed during the State Tax Service inspections. Sometimes, these are tens of millions of hryvnias."

Yuriy Holosov adds that sometimes law enforcement agencies register violations of the business activities procedure at petrol stations (Article 164 of the Code of Ukraine on Administrative Offenses). But this article is where sanctions are among the lightest. Also, the illicit sale of excisable goods falls under Article 204 of the Criminal Code of Ukraine, namely the illicit manufacturing, storage, sale or transportation for the purpose of selling excisable goods. Besides the fine, this violation may also result in confiscation and destruction of illegally manufactured goods. In case of a repeated offence, the law provides the sanction of up to five years of imprisonment. 

According to the Economic Security Bureau in the Odesa region, their agency has been investigating the Petromol chain for possible tax evasion since 2021. The case is still at the pre-trial investigation stage.

It is not the first time Petromol has been caught for illegal activities. Yet, as we can see, this did not affect the overall situation, not even after a large-scale law enforcement raid in 2021, when there was another round of country-wide action against the illicit market for excisable goods circulation. This was reported by the National Police of Ukraine. 

Numerous investigations

Petromol is an umbrella for several private companies that are not related at first glance. Therefore, it is extremely difficult to investigate the activities of each company hiding under the unregistered Petromol brand. However, some information can be tracked down in open sources.

For example, in 2018, the Obolonskyi District Court of Kyiv granted access to the property and documents of several companies as part of an investigation into the illegal storage and sale of excisable goods through the Petromol chain. The investigation found that the brand could be controlled by Vitla-PSV, LLC, Tadiy, LLC, and Inter-Nafta, LLC.

Inter-Nafta is involved in proceedings over the illegal construction of a petrol station. For instance, in 2018, the Ovidiopol Raion Court considered a petition regarding the illegal use of the land plot in Prylymanske village, where a petrol station was built.

The company was also involved in possible damage to the drainage system and barrier fencing on the Kyiv-Odesa highway in the Biliaivskyi raion. 

Furthermore, the Court Register indicates that a part of the Kyiv-Odesa motorway may have been damaged during the construction of another Petromol complex.

It is also noteworthy that, in addition to the above companies, other business entities may sell fuel directly at the chain's petrol stations. For example, the Court Register holds a ruling in a criminal proceeding regarding possible tax evasion by Format SV LLC, Forsazh-Vip LLC, and Deks-Oil LLC. Some of these companies have already changed their registered addresses and names. The investigation claimed that from 2017 to 2018, several entities evaded taxes worth over UAH 4.5 million by selling petroleum products in the Petromol chain for cash.
But who controls this chain?

Overseas beneficiaries

The Petromol chain seems to be owned by the Vitkov family, represented by Bulgarian and Moldovan nationals. For instance, Inter Oil LLC was registered in 2003 in the village of Zoria, Odesa region. The company's beneficiary is Petar Vitkov, a Bulgarian citizen.  

In 2015, the company would actively win budget contracts, concluding agreements totalling UAH 11.7 million. It begs the question of how those managing taxpayers' money paid this company.

Petar Vitkov is also a co-founder of Vitla-PSV LLC. Sergii Vitkov, a Moldovan citizen, is the other founder of this company. Both have the same patronymic, so it’s fair to assume that they are brothers. Vitla-PSV was also registered in 2003 in Bolhrad, Odesa region.

It is worth noting that Volodymyr Perevertailo, the director of this company, is married to Maia Diakova, the head of the laboratory unit at Izmail City Hospital. She ran for the Izmail City Council in 2020 from the Servant of the People party.  

In addition, Petar Vitkov is the founder of Tadiy LLC, established in 2011. The company’s co-founder, Volodymyr Vitkov, is apparently another relative of Petar. The official registration address is the village of Kyrnychky, Izmail raion of the Odesa region. Both Vitkovs indicated their address as the city of Shumen in Bulgaria.

Business in Bulgaria

According to the Register, the Vitkov family has built a business not only in Ukraine. The Bulgarian registry shows that Petar, Sergii, and Volodymyr Vitkov are co-founders of Bulgartrans in Shumen (Bulgaria), officially registered at 25 Vasily Aprilov Street. Petar Vitkov provides the same information as a beneficiary of Inter Oil LLC. The fourth Bulgartrans co-founder is Zakhar Banov. He is associated with a number of other companies, particularly Mercury Trade, with the registered office at 97 Tsaria Osvobozhitelia Street, Shumen (Bulgaria).

Bulgartrans, registered at this address, is a Bulgarian logistics company. This company has been on the market since 2007, providing services in goods transportation, in particular to Russia. Although the Russian language is currently inactive on the official website, the company still offers to deliver goods to Russia. Bulgaria, Romania and Turkey continue to cooperate with the aggressor country, while quite a few international companies seize any business relations with Russia. The company also offers its services in the Republic of Belarus.

According to lawyer Yuriy Holosov, this situation should be investigated by State Bureau of Investigation and Financial Monitoring representatives. After all, with the advent of Russia's full-scale aggression against Ukraine and amidst martial law, any cooperation with the aggressor country should be closely monitored: "Here, we can raise this issue at the level of the National Bank of Ukraine. Of course, the State Bureau of Investigation will initiate entering information into the Unified Register of Pre-Trial Investigations to investigate cooperation with the aggressor country’s representatives." 

We tried to contact Bulgartrans via its official email and called the number indicated in the Inter Oil LLC registration documents. We failed to get a comment. Bulgartrans left our request unanswered and Inter Oil's phone number is no longer in service. We also texted the company's official Facebook page. The company’s representatives read our message but have not yet responded.

To sum it up, during the full-scale war in our country, there is a chain of petrol stations that sell fuel without fiscal receipts and accept cash only. At the same time, the owners of this network in another country are cooperating with the aggressor country, delivering goods there and, presumably, paying taxes.
 

Олена Чернишова