Caution to Petroleum Buyers

We will be starting this blog on fundamentals to determine the authenticity of a Petroleum Supplier, or rather if you are dealing with a scammer posing as a Petroleum Supplier. We will be posting excerpts and links from others blogs and sites to give us an insight on the reality of what we actually see in the net and the unsolicited offers we receive in our emails.

Part-1 1) Many of the brokers and suppliers appearing on the web like to attach "Refinery" or something similar at the end of their business names. Please note that refineries do not make offers since they have their own subsidiaries, affiliates, and export sales departments who handle their export sales. As it is, they have their regular accounts/end-buyers who take up most of their annual production. This is primarily intended to give an impression of their size and capability to supply.

One simple way to verify is to check on their "INN" number which is equivalent to the "TIN". This will bring you to several sites which will give details of the company registered under that "INN". Some of the sites I frequent is www.spark-interfax.ru. https://nalog.io. basis.myseldon.com, and fuelscamalert.com. A fraud or scammer usually mimics or provides a link to an existing or legitimate name or site while making inconspicuous changes or addition to the name. Remember that they will try to give an impression that you are dealing with the legitimate company using the legitimate company's website and logo. These copycats should not be confused with the legitimate trader or supplier.

When you open the site/s I referred to above, you will find basic information which would give you some details of the "supplier" making you the offer. You might have to buy however into some of the more critical information of your subject supplier.. You would notice that a lot of them have an authorized capital of 10,000 rubles equivalent to more or less US$157.40. There are also information if the company is under liquidation and the assessment of the site on the status of the company. (to be continued ...)

Part-2 Many of these enterprises have been existing for a while (don't even bother with newly registered companies) and though they have registered as oil and petroleum associated gas production or something similar to that, we all know that it is far from the truth with the size of authorized capital that they have. As such, it is unimaginable for them to become a title-holder much more a refinery. Some are even registered as furniture shops or automotive repair shops. Many would be claiming to be direct mandates of reliable refineries whose profile when you check will turn out to be similar to those who claim to be mandates. These are in fact brokers of other brokers who have little understanding of the details of the fuel industry. That is why when asked for clarification, they will stick to ... follow the procedures. Don't be a time waster. These are the familiar replies you would receive. Others are outright SCAMMERS. Most of these scammers use Russian names but could not even speak a word of Russian. Be careful when you send out replies of who you put in the loop. They will use any information they can lay their hands on and send similar offers. It would help if you know someone who speaks Russian speak to them over the phone. That is what I do. You will know immediately if you have a scammer on the other line.

It would always be proper to check on platts pricing to determine if offers that you receive are reasonable. If it is ridiculously low, do not be tempted by the prospect of making a windfall on profit but rather be wary that as often said ... if it is too good to be true, it is because it is too good to be true.

Next time I will be writing about assessing a Soft/Full Corporate Offer, reading through the procedures, and detecting a fake document.