Brian Hayes (Dublin South West, Fine Gael)

I thank both Deputies Butler and O'Mahony for raising this important issue that affects not just the people in the constituencies both Deputies referred to but adversely affects the ability of the Revenue Commissioners to raise tax legitimately and keep in business those suppliers and producers who are paying their taxes legitimately.

I am informed by the Revenue Commissioners, who are responsible for the collection of mineral oil tax and for tackling the illicit trade in fuel products, that they are very conscious of the threat to the Exchequer posed by the laundering of markers from mineral oil. Marked gas oil, commonly known as green diesel, is subject to mineral oil tax at a rate of €88.66 per 1,000 litres, while the rate for auto-diesel is €465.70 per 1,000 litres. In addition, marked gas oil is subject to the lower VAT rate of 13.5%. The resulting total tax differential is around 50 cent per litre. As the Deputies rightly point out, there is enormous advantage for those people who deal in this illicit trade.

This differential offers a very significant incentive for "oil laundering", that is, the removal of the chemical marker from marked gas oil to facilitate illegal use as auto-diesel. This is a particularly serious offence, carried on by organised criminal gangs. It carries a maximum penalty of €126,970 or five years imprisonment, or both. Any equipment used for oil laundering and any vehicle found to be transporting laundered fuel is liable to forfeiture.

As with other illegal activity, it is not possible to provide a reliable estimate of the extent of oil laundering activity. The Revenue Commissioners, who are responsible for mineral oil tax and the control of mineral oils, are tackling this issue on a number of fronts.

There has been ongoing extensive enforcement action, which has led to the detection of oil laundries and the prosecution of individuals and companies involved. To confirm what Deputy O'Mahony said in his opening remarks, in 2010 four oil laundries and over 288,000 litres of laundered oil were seized. Also in 2010, nine retailers were found dealing in laundered oil, and eight haulage companies were detected using laundered oil. There were four convictions for laundered oil offences.

Already in 2011, eight laundries have been detected and more than 300,000 litres of laundered fuel have been seized. There have been 11 arrests resulting from these operations, and eight tankers and 19 other vehicles have been seized. Several retailers and haulage companies have also been implicated. One can see in the difference between the figures for 2010 and 2011, even with the incomplete information we have for this year alone, the very substantial rise in this activity even in a 12 month period, to which the Deputies have referred.

Revenue has played an integral role as part of a cross-Border multi-agency organised crime task force which has been set up specifically to deal with the illicit trade in mineral oil in the Border area. The multi-agency operations are planned to supplement the normal ongoing level of Revenue detection and enforcement activity. Since its inception this combined force has successfully targeted a number of illegal operators in the Border area.

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