Oireachtas Joint and Select Committees

Wednesday, 3 December 2014

Joint Oireachtas Committee on Transport and Communications

Fuel Fraud: Revenue Commissioners

10:50 am

Mr. Gerard Moran:

To answer the Deputy's first question about why it is so regionally concentrated, and whether borders are a problem, we do not know at the moment why it is concentrated in a couple of regions. It is clearly to do with the supply chain and distribution system. This was not just one or two filling stations, it was a much larger number and it was obvious they were being supplied. That is what we are examining at the moment. We have not found evidence of any systemic problem outside of the areas of significant concentration. There have been some but it has tended to be in the car-hire sector or similar, where the driver may have bought contaminated petrol in one of the focus areas. Borders can be a problem in that they provide arbitrage possibilities for criminal gangs if they can move goods from one place to another. That often provides an economic base for them to get up and running and provides the resources on the back of which they can develop wider and more extensive criminal activities. It is always very important to look at price differentials here versus the North to try to minimise the possibilities for that kind of arbitrage as much as we can.

The Deputy asked about petrol stretching not being a new phenomenon. It is not, but what I want to make clear is that it is actually relatively rare and we do not encounter it much. We had to go back quite some time to find the last occurrence of it when we were looking for an example for the committee. I am not aware that it is a common occurrence at all, but it is always on the radar and occasionally there will be reports of it happening somewhere to a small degree and probably at a very low point in a distribution chain. I am not aware of anything of a similarly systemic nature occurring elsewhere any time recently.

The new marker will apply in Ireland and the UK only and it follows a joint initiative we undertook with Her Majesty's Revenue & Customs to get a more effective marker given the vulnerability of the existing one. There is a Europe-wide marker and the new one is a further marker the authorities in Ireland and the UK will apply, and it will come into place from the end of March next year.

We would not really have a role in respect of individual claims except where we have tested somebody's car. If we have the results of tests, we would be able to provide them to the owner of the car. We would not be able to advise them about filling stations. As a tax administration, we have to operate on the basis of taxpayer confidentiality so we are not in a position to provide information about any taxpayer, whether it is a filling station or anybody else, to a third party. In the context of litigation, if we were asked for evidence we would have to get legal advice in circumstances like that as to what we could or could not provide as evidence.

On testing of engines and petrol, I have seen suggestions on some blogs and boards advising people to take samples of petrol. I must say that people should be careful of the risks of messing around with petrol. It is a highly flammable commodity so I would think nobody would want to encourage people to do that. I do not know whether it is possible for the NCT to test for stretched fuel but I suspect not.

My understanding is that a person who wants to see whether damage has been done to an engine basically has to go to a garage to have it disassembled. It is at that point that one can see whether corrosive material has built up where it should not be. This would be evidence of the problem.

I was also asked about other areas where this might have an impact. We are not aware of such areas. The only instances we have heard of relate to cars. There seems to be some variability in how it affects different types of cars, such as newer or older cars or those with different engine sizes. That is why some people experienced fairly catastrophic problems with their cars very quickly after filling them with contaminated petrol, whereas in other instances these problems did not manifest themselves for quite some time. It depends on people's driving patterns and on how much fuel was in the tank when the adulterated petrol was put in. Many such variables mean that the pattern in which these problems are manifesting themselves is not uniform.

I will conclude by returning to an earlier question that I might not have answered. All the indicators suggest that these problems are related to fuel that was bought at a point in time during the summer. That is why problems which had not manifested themselves before now are still manifesting themselves occasionally. It is probably for reasons like that.

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