Govt 'turning a blind eye' to fuel smuggling

Petrol retailers in the North hit out at the British government today for rejecting the demands of MPs to cut fuel tax in a bid to wipe out a £300m (€447.5m) smuggling racket.

An all-party Westminster Committee claimed cross-border petrol and diesel operations could be dealt a fatal blow by bringing duty levels into line with the Irish Republic.

However, Northern Ireland security minister Paul Goggins resisted their call due to economic and environmental concerns.

His refusal provoked a withering assessment of the authorities’ fight against fuel rackets run by crime gangs and paramilitary organisations.

Ray Holloway, director of the Petrol Retailers Association, claimed: “It’s clear there is some turning-a-blind-eye by the government.

“They say if they made tax the same it would move the problem across to Scotland. But it’s easier to police a sea route than a land border of 315 miles.

“There is a total lack of political will to address this issue. It funds some very well established criminal organisations – £300 million is quite a nice income – and it has destroyed the fuel industry in a supply sense in Northern Ireland, closing hundreds of small forecourt businesses.”

The Northern Ireland Affairs Committee had urged the government to take action in its report into organised crime but after studying their dossier Mr Goggins claimed a fuel tax change would not work.

He said: “The government believes that regional variation in duty rates would compromise the established principles of unitary taxation, with cost implications for UK businesses and the Exchequer.

“It would also conflict with the UK’s environmental strategy, of which fuel duties are a key element.

“Any reduction in fuel duty rates in Northern Ireland, to achieve parity with those of the Republic, would involve a degree of revenue forgone and… it would not guarantee that organised crime would abandon oils fraud altogether.”

Representatives of those under pressure from the black market who backed the call for fuel duty harmonisation also expressed surprise at the government’s stance.

Wilfred Mitchell, the Policy Chairman of the Federation of Small Businesses, said: “It would take away much of the incentive for the cross-border fuel smuggler and take the pressure off many of the petrol stations on the northern side of the border who are struggling to stay in business.”

In its report, published in July, the committee warned that the amount of illicit fuel sold in the North remained unacceptably high.

Members stressed much needed to be done, despite the increased disruption of laundering plants and gangs.