New marker to be used to combat fuel laundering

A new product to identify illegal diesel is to be introduced later this year in a joint move by Revenue here and in the UK to tackle fuel laundering for the purpsose of evading excise duties.

The Revenue Commissioners revealed that, in conjunction with their counterparts in the UK, they had identified a product to mark rebated fuels, to make it harder for fraudsters to tamper with the product.

Rebated fuel is marked with dye and chemical markers so that its use for any other purpose or illegal sale can be identified.

Launderers primarily target green diesel in Ireland or red diesel in the UK, filtering it through chemicals or acids to remove the Government marker.

These chemicals and acids remain in the fuel and damage fuel pumps in diesel cars.

The excise duty on marked gas oil is charged at 10 cent per litre instead of the full rate of 48 cent per litre.

Excise duty on kerosene, used for heating, (which will also have the marker added to it) is 5 cent per litre.

"During a rigorous, joint UK-Ireland evaluation, the chosen marker, which will be produced by Dow Chemical Company, proved significantly more effective than the current markers on the basis of laboratory testing," Revenue said in a statement.

“This testing found that it was highly resistant to known laundering techniques. It will be implemented in both countries following consultation with the oil industry and other affected sectors and will be used alongside the current marker mix.”

Revenue chairman Josephine Feehily said the fuel laundering problem in Ireland involved the laundering of marked fuel sourced on both sides of the Border.

“In this respect it is hugely significant that both Revenue authorities worked together to introduce a single marker which will enhance our ability to tackle this joint problem,” she said.

She said the initiative built on many years of collaboration with colleagues in Her Majesty's Revenue and Customs, particularly in Northern Ireland.

“Fuel laundering has many detrimental consequences, not least its significant impact on the Exchequer,” Ms Feehily said.

“While we have introduced many initiatives in recent years to tackle this problem, including more rigorous supply chain controls as well as robust enforcement actions, the introduction of the new fuel marker is an important element of our strategy in tackling this crime.”

The chairman said the legitimate trade could also contribute to closing down illicit outlets by providing any information they may have on the sale of laundered diesel.

“They should report this through their representative associations to Revenue. Other businesses or members of the public that have any information regarding illicit fuel should contact their local Revenue office in confidence.”

Customs officers are regularly to be seen testing vehicles for laundered diesel on roads around the Border and even in Meath and north Dublin.

Between 2011 and 2013, 119 filling stations were closed by Revenue throughout the State for breaches of licensing conditions.

Over 2.7 million litres of fuel were seized and 29 oil laundries were closed down.

While the exact figure for money lost to the Exchequer as a result o f fuel laundering was not available, Revenue said it was “a significant” threat to revenue.

A spokeswoman for Revenue said the new product would be introduced later this year following consultation with the oil industry and a period of live testing.

Revenue said that while fuel laundering had been a problem for many years, it remained a “marginal activity” because the sulphur content of marked fuel was higher than that for road fuel and therefore the sulphur content continued to distinguish laundered fuel from genuine road fuel.

But in January 2011, environmental requirements in relation to the sulphur content of fuel changed, which resulted in marked fuel with the same sulphur content as road fuel coming onto the market.

This meant Revenue could no longer rely on sulphur content to identify laundered fuel and fuel laundering became more viable and criminal gangs intensified their laundering and distribution activities dramatically from the first half of 2011.

This was evidenced in an increase in the number of “pop-up” forecourts.