Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

Yes. I thank Deputy Naughten for his contribution. I am aware, having received a series of parliamentary questions from Deputies west of the Shannon of the high incidence of petrol stretching there, to which I have given lengthy replies.

On the supply chain data as reported by traders, forecourt retailers must report their petrol-diesel purchases on a monthly basis. They report on a transaction by transaction and delivery basis. This reflects the much greater incentive for diesel fraud as against petrol stretching. In regard to the terms "diesel laundering" and "petrol stretching" there is a lot more profit to be made in laundering than there is in petrol stretching. This is the reason for the different treatment of diesel and petrol.

On the kerosene issue, it is illegal to add kerosene to petrol. There is no tolerance of that. Diesel can be detected in petrol because of the marker in kerosene. From 31 March next a much more effective marker will be in use for all marked fuels, including kerosene. This will make detection more effective. As a result of a joint operation between our Customs and Excise driven by Revenue and the authorities in the UK a new marker that will be effective on both sides of the Border will be introduced. Previously, as markers were developed, antidotes to them were developed. The marker now developed is more effective and will come into play on 31 March next.

The Deputy also asked about penalties. The penalty in this regard is, on summary conviction, a fine of up to €5,000 and 12 months maximum imprisonment or both. If the case goes to indictment the fine is €126,790, which is very large, and-or five years maximum imprisonment or both. These fines were last updated in the Finance Act 2010. Fines are a matter for the courts. Fines have been increasing as the courts treat these matters more seriously. In regard to the odd numbers issue, this arises out of indexing of the fines as introduced. The figure of €126,790 is a result of that.

An extensive range of new measures have been introduced over recent years to tackle fuel fraud, including enhanced supply chain controls and the acquisition of a more effective fuel marker. The key measures include: the strengthening of the licensing regime for auto fuel traders with effect from September 2011 to limit the ability of fuel criminals to get laundered fuel onto the market; the introduction of a new licensing regime for marked fuel traders in October 2012, which is designed to limit the ability of criminals to source marked fuel for laundering; the introduction of new requirements in relation to fuel traders' records which have stopped movements and fuel deliveries and ensures data is available to assess supply chain analysis; and the introduction in January 2013 of new supply chain controls following significant investment in new IT systems. These controls require all licensed fuel traders, whether dealing in road fuel or marked fuel, to make monthly electronic returns to Revenue of their fuel transactions. Revenue is using this data to identify suspicious or anomalous transactions and patterns of distribution that will support follow up enforcement action, where necessary. Intensified targeting, in co-operation with other law enforcement agencies on both sides of the Border of enforcement action against suspected fuel laundering operations, has also been introduced and increased.

The Revenue Commissioners reviews its strategies in relation to fuel fraud on a continuous basis. Where it identifies a need for legislative provisions to strengthen the legal framework for tackling illegal activity and protecting legitimate business these proposals will be considered carefully. Action against the illicit oil trade in the period since 2011 has led to the detection and closure of more than 30 oil laundries and to the seizure of 3 million litres of illicit fuel. In addition, more than 120 filling stations were closed for trading without a licence or for breach of licensing conditions. All the indications, based on feedback from the industry and tax revenue from diesel consumption, are that these measures have been successful in tackling the laundering problem. I have had discussions with the trade which is very complimentary about the actions taken by Revenue. We get empirical evidence on the basis of excise from diesel and petrol. This naturally would be increasing as the economy grows. Eighteen months ago when the economy was either static or growing slowly there was a significant increase in petrol and diesel consumption. The trade attributed this to the effectiveness of Revenue in putting the illegal traders out of business. As a consequence, legal traders' sales have increased. The next step is the introduction of the new marker. If it is successful enforcement will be easier.

If one has a marker that is easily identifiable, one can pinpoint illegal fuel or additives, such as kerosene, to stretch petrol. The will is there with Revenue and the personnel is there with Customs and Excise. It is the techniques that have been lacking for a while, because the laundering techniques were almost equal to the marker techniques, but I understand that has changed and the tests they have done on this particular marker hold out significant hopes that it will be a very significant weapon in the fight against fuel laundering. I will ensure Revenue knows of the Deputy's concern, and that of our colleagues, about petrol stretching which, in the overall scheme of things, is kind of minor league activity compared to fuel laundering. However, there have been widespread incidents in the west of Ireland and it wrecks engines, so I can see why there is such concern.