After three days of raids, officers uncovered over 79,000 litres (17,500 gallons) — with an estimated loss of duty worth around £56,000 — of suspected stolen fuel from several petrol stations across the UK.
HM Revenue and Customs (HMRC) officers seized the fuel and temporarily closed petrol stations in Leeds, Motherwell, Cowdenbeath, Fife, and the Hillington area of Glasgow between the 11th and 13th of last week. Officers arrested a 30-year-old man in relation to the crime.
The man, although arrested in Leeds, is from the village of Crossmaglen in County Armagh, Northern Ireland. The police took him to Scotland for an interview but later freed him, awaiting further investigation.
Officers then seized an additional 1,500 litres of suspected illegal fuel from two vehicles in the Scottish town of Loanhead, in Midlothian. Only days before, HMRC and police officers dismantled a suspected fuel laundering plant in Newry, County Armagh, Northern Ireland. HMRC reported that the plant had the potential to generate over 10million litres of illicit fuel per year, causing a loss in revenue of around £6.5million. Officers arrested two men who they later released on bail.
Yet, not only is forecourt fuel laundering a big problem, but there is also ‘bilking’, which we wrote about last November. Bilking is the act of leaving a petrol station without making payment. The Petrol Retailers Association (PRA) estimates that independent fuel retailers lose around £30million worth of fuel each year from this crime alone.
Most petrol stations make only a small profit from fuel sales and, instead, rely on the sale of other products and services to make the bulk of their money. But with high petrol and diesel prices—and taxation accounting for around two-thirds of the total price of fuel—while one cannot condone either of bilking or fuel laundering, it is not surprising that fuel crime is big business.
The true cost
Joe Hendry, Assistant Director for the Fraud Investigation Service at HMRC, said:
“Fuel laundering is unregulated and dangerous. Illicit fuel is sold at reduced prices and motorists may think they are getting a good deal because it is cheaper. I would caution them to think again as the true cost is far from a bargain.”
The true cost of cheap, illegal fuel is considerable. The by-product of fuel laundering is a sludge of oily waste mixed with sulphuric acid, which is harmful to both humans and animals.
Authorities report that the perpetrators involved in the illegal operation pour the toxic waste down drains—where it has made its way into water treatment plants—and dump containers full of the sludge in various locations, including in rural farming areas.
There are still further consequences…
Steve Tracey, Assistant Director of the Fraud Investigation Service for HMRC, said:
“We remain alert to the often dangerous methods criminals use attempting to remove the government markers from rebated fuel and will continue to work with our multi-agency partners to tackle this crime, one we are determined to detect and disrupt.
“Given that laundering-plants have been found close to homes and retail sites they have always posed a serious risk to the public. Fuel launderers abandon harmful waste and transport fuel in vehicles that are unfit for purpose and unsafe.
“We believe criminals are now experimenting with processes that carry a risk of explosion as they seek to defeat fuel markers and I would urge anyone with information about this extremely dangerous activity to report it to HMRC…”
Laundered diesel comes from rebated red (in the Republic of Ireland it is green) fuel, also known as marked mineral oil. It’s sold at a lower rate of duty than regular white diesel for vehicles not taxed for use on the roads, such as farming or construction vehicles, which means those selling the laundered version can profit from the difference in price.
To avoid detection, those involved in fuel laundering remove the dye markers using acid or silicon dioxide, leaving colourless fuel, which, when used in vehicles, can cause serious damage to the engine—just as petrol mixed with biofuels and methanol (to ‘stretch’ it) causes damage.
Research carried out in April 2017 by AA Ireland showed that nine per cent of Irish motorists suspected they had bought laundered fuel in the past without knowing and that 55% of those drivers believed the laundered petrol or diesel damaged their car. Although illicit fuel is a much more widespread problem in Northern Ireland and the Republic of Ireland, this illegal enterprise also occurs in mainland UK.
Officers warn motorists that owners of vehicles found running on illegal fuel are subject to expensive fines. Add in the risk to health, the damage to car engines, the environment, and the clean-up of each discovered fuel laundering plant—which comes from the taxpayer and can cost tens of thousands of pounds each time—the notion that fuel laundering is a victimless crime is wrong.
What is your opinion on fuel laundering and bilking? Do you think it would be such a problem if the taxation on petrol and diesel was not so high? Let us know your views in the comments.