Cheap Diesel Fuel

Cheap fuel can come at a high price

PADDY COMYN

RECESSION HAS bitten its teeth hard into Ireland. There are almost 438,000 people on the Live Register. One of the consequences of that is an increase in criminal activity and the black market. With consumers seeking any way of making money stretch further, motorists are looking at fuel costs.

According to the Automobile Association, fuel prices have dropped for the first time in eight months, yet the average driver is still spending more than €227 per month on fuel.

Fuel laundering used to be something that was hushed and whispered about in Border counties and rural areas. There was often the suspicion that the agricultural sector would sometimes bend the rules, using dyed agricultural diesel for other purposes.

But in recent years the practice has taken a more sinister turn. In May of this year Customs and gardaí in Co Meath uncovered a sophisticated diesel laundering plant which, it was reported in this newspaper, was believed to be making a profit of close to €100,000 a week. A customs officer who was removing items from this seized plant was then attacked and masked men set his truck alight. According to Revenue, between 2005 and 2010 nine fuel-laundering plants were detected. So far in 2011, five such plants have been detected. They are on the increase.

Revenue cannot fully estimate the cost of this to the State. “It is not possible to accurately estimate activity in the ‘shadow economy’,” a Revenue spokesperson told The Irish Times. “However, the uncovering of any oil laundering plant is very important for the economy – the supply and use of laundered fuel can have a detrimental impact on legitimate trade such as hauliers who are compliant with the laws regulating their business. The competition who purchase the illegal fuel can undercut them and, through unfair competitive pricing, put the legitimate trade out of business.”

This year, these plants have been found in Louth, Monaghan, Meath and Offaly, but are often relocated to avoid detection.

These plants will remove the dye or “launder” marked gas oil. This diesel fuel, which was previously coloured red but now green, is subject to a low rate of excise duty and VAT. It is an offence to use in ordinary motor vehicles and anyone found doing so is liable to prosecution and the vehicle is liable to detention and seizure. These plants will use acid to wash out the chemical markers in the fuel and as a result they could be undetectable by regular Customs checks.

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