Retailers ‘drawn to illegal fuel trade’

Struggling retailers are increasingly being drawn into the illegal fuel trade as laundering operations escalate in the Border counties, it has been warned.

David Blevings of the Irish Petrol Retail Association said the group was aware of oil distributors being approached by people looking to sell illegal laundered fuel.

Speaking at an Oireachtas committee hearing on an issue that could cost the exchequer €200m annually, Mr Blevings said legislation does not permit proper enforcement as retailers only face a one-day closure and a fine if caught with illegal fuel.

“There is no fear factor out there, so more and more struggling retailers are taking illegal fuel,” he said. “We are also aware of forecourts closing down but reopening run by criminal networks with laundered fuel.”

Mr Blevings called for a “three strikes and you’re out” system.

Gerard Moran, assistant secretary with the Revenue Commissioners, said fuel laundering had “escalated dramatically” in the past year. He said “very specific” legislative measures would be published in the coming days to deal with the issue.

Mr Moran said given that €1.1bn was collected annually in excise duty on road diesel, the scope for losses to the exchequer was “very significant”.

He said there was no way of estimating the cost of the problem. If laundered fuel accounts for 5% of the market, that is a loss of €48m in excise alone. He said it also undermines competitiveness, damages the environment, vehicles, and helps sustain organised criminals.

The biggest problem was with marked gas oil or “green diesel”. Revenue warned there was no data on the movement of this product, which accounted for 90% of laundered fuel. Anyone can buy large quantities of marked oil and do what they wish with it.

“We closed nine laundries in 2011 and arrested 16 people,” said Mr Moran.

“One million litres of oil was seized, two thirds of it in the last three months of the year. We have tightened up licensing and closed 32 filling stations with no license in recent months.

“However, launderers can still get ample supplies for laundering, and new legislation is under consideration.”

The Department of the Environment said it had spent €5m — €1m last year alone — cleaning up sludge from “diesel washing”.