The last three years or so have seen a big increase in diesel laundering. Fuel smugglers have been making out like Al Capone during Prohibition.
Fuel smuggling and laundering is big business and is perpetrated by some of the most despicable people on our island. With fuel so expensive it may be very tempting to buy diesel at a knockdown price but the AA implores motorists not to make that deal with the devil. It may save a few bob but the expense, moral and financial, means it is just not worth it.
There is a stereotype that fuel laundering is mostly happening in border counties. Not true. I am aware just this year of service stations in Roscommon, Galway, Offaly, Westmeath and Dublin as well as those in border areas. Who is buying this fuel, and why?
The scale is enormous. The AA has seen industry estimates that laundered diesel could be as much as 10 per cent of the total market. The loss to the exchequer is certainly not less than €100 million and could be as much as €200 million.
The great majority of garage owners are honest. Like the rest of us they are having a tough time of it these days. No-one is making money easily. The margins on fuel are so low that if you buy €30 of diesel and a cup of coffee in a garage they are literally making more money on the coffee. And then they get a phone call, or maybe someone drops in for a chat when its quiet. There’s a load of diesel available, it can be delivered by a respectable looking tanker this afternoon. Just once, you can make 30 cent a litre on it instead of three or four. It is tempting.
And before you know it you have Al Capone for a partner. Another load arrives, and another, and it is made completely clear to you that you cannot turn them away. It really is a deal with the devil. In a short while your business is not your own and you are tied to these guys.
Add to that the damage done to our environment by the reckless disposal of diesel sludge and by-products from the laundering process. The Garda have found hazardous fuel waste dumped close to a water treatment plants, rivers and lakes again down to these criminals.
Motorists normally buy laundered diesel without knowing it. It is entirely possible that I have bought some, or that you have. Because of the chemicals used in the laundering process the protracted use of the fuel will damage your engine and shorten the car’s life, and could easily see you stuck for a repair that runs to thousands of euro.
One intriguing suggestion that has been made by the legitimate industry is worth pursuing. Agricultural diesel with its green marker dye is supplied to farmers and various other groups for use in off-road machinery, and that’s fine.
But why don’t we cut off the criminal industry at the source by getting rid of green diesel completely and instead bring in a rebate system. Farmers and genuine users of green diesel can then just buy the normal stuff and be compensated for the difference by claiming it back on their taxes.
It might mean some more administrative work and some initial inconvenience in terms of cash flow. But with about €150 million a year being lost to a thriving criminal industry there is a lot of money available to get such a scheme up and running.
That has not happened yet but the authorities are taking the issue seriously. From July there will be tighter controls on fuel wholesalers and a new special licence for those who legitimately supply agricultural diesel.
This is a start, but not enough. The profits are too big and the punishments too small at the moment, and if you give organized crime an opportunity like that they will take it.