New dye could wipe out fuel laundering

Fuel laundering is a major issue in this area

Illegal fuel laundering should be “virtually eliminated” by next spring with the introduction of a new dye, Britain’s Revenue and Customs has said.

It said it will be almost impossible to remove the marker put in tax-rebated fuel, which is intended for agricultural use.

It means a roadside check can easily detect motorists who use discounted red diesel.

This problem is particularly evident in the border region with numerous illegal fuel plants having been raided in and around north Louth in recent years and countless litres of toxic fuel waste dumped around the county at great cost to taxpayers.

Senior HMRC official Pat Curtis said: “The whole idea of this marker is to virtually eliminate laundering.”

After a number of years of trials, the new fuel marker will be implemented in the Republic of Ireland and the UK in April 2015.

Red diesel is cheaper than regular diesel and is intended for off-road agricultural use.

Organised crime gangs have established sophisticated laundering plants to remove the dye, sourcing chemicals from China and using the internet to improve their techniques, Mr Curtis added.

Egan calls for proper policing of fuel laundering

Stephen Egan, who will be running for Fianna Fáil in the forthcoming local elections

Fianna Fáil local election candidate for Dundalk South, Stephen Egan, is calling on the government for proper policing of fuel laundering.

Reacting to the number of toxic diesel sludge that has been dumped in the area in recent times, the Blackrock man called on the government to intervene to prevent the illegal fuel trade from prospering.

“What we are currently seeing is actual ‘fuel arbitrage’.  As an ex-currency trader, arbitrage is basically buying a product in one market and selling it at a higher price in another market. It could be anything from apples to fuel.

“When you eliminate the arbitrage possibility by equalising the price of the product you are trading through either government intervention or market forces, arbitrage will cease. There needs to be an equalisation of the price of green and red diesel. This will eliminate the arbitrage and thus the trading in red versus green diesel as all profits from the trade will be eliminated,” explained Mr Egan.

“Price equalisation is the ideal system or having users of green diesel pay the VAT up front and then claim it back. The price would not necessarily have to be the same; just close enough so that the cost to the launderers of actually laundering would mean they wouldn’t make a profit. The price could be €1 to €1.03 or €2 to €2.03.

“It has been difficult to obtain prosecutions on fuel laundering from the legal perspective. Having spoken to people about this, it appears the whole business is operated like a franchise. Those with executive power in the criminal infrastructure sell or lease all the chemicals and equipment to franchisees, which are responsible to the actual laundering.

“Garda resources and time are being diverted to policing the current fuel situation- this time be better spent if better government policing of the fuel situation in its entirety be a more effective method of sorting the current fuel problem,” said Mr Egan.