The investigations unit of Customs and Excise has launched a major inquiry into the sale of illegal auto diesel in garages across the State.
Customs officers have identified at least 14 forecourts, some operating under the names of well-known oil companies, and 26 hauliers, using the laundered diesel.
The investigation has also uncovered an extensive and highly lucrative laundered diesel-smuggling operation between Belfast Port and Dublin Port and the UK, mainly Liverpool.
The smugglers are predominantly from the Border area and have made massive profits by buying the coloured or marked diesel at around 40 cent a litre. It is considerably cheaper than auto diesel because it is subject to less taxes.
It is then laundered or washed with chemicals to remove the dye and produce what appears to be auto diesel, for sale to garages and other distributors.
Genuine auto diesel is around 94 cent a litre in the Republic, but about €1.20 in the North and the rest of the UK. This gives a profit margin of between 50 and 80 cent a litre. The quantities involved always run into tens of thousands of litres.
The sale of laundered diesel in the Republic has traditionally been associated with the Border counties. But in 2003 customs officers mounted Operation IMCO and took covert sampling of diesel from forecourts around the country.
A follow-up operation, IMCO II, is still continuing. Between them they have resulted in nine retail outlets being convicted by the courts and another 15 prosecutions are pending.
A number of hauliers have also been convicted.
A customs source told The Irish Times that checks last year resulted in 72 detections. This included 14 retail outlets, 26 hauliers and a further 15 hauliers from Northern Ireland.
Seven oil tanks and almost 270,000 litres of laundered oil were also seized
The loss to the Exchequer of a single undetected laundry that is processing 30,000 litres a week amounts to over €800,000 a year if sold on the Irish market.
However, the current annual loss to the UK exchequer of laundered diesel is in the region of £600 million.
Two investigations in the last year have found that laundered diesel is being smuggled in substantial quantities from Ireland to the UK on the cross-channel ferries. In each case the movements were in the region of 1.3 to 1.5 million litres of laundered diesel, which is equivalent to a profit to the smuggler, and equal loss to the UK authorities, of up to £800,000.
A senior operator in this smuggling route is based near the Louth Border and is being investigated by the Revenue Commissioners and the Criminal Assets Bureau.
A recent investigation into the sales invoices of a well-known oil supplier revealed a discrepancy of 34 million litres in one year between what it purchased and then legitimately sold .