Tuesday, 18 November 2014
Topical Issue Debate
Motor Fuel Fraud
I thank the Ceann Comhairle for allowing me to raise the issue of petrol stretching, which the Minister of State has dealt with before. Two months on, we are no further in people's understanding of a solution to the issue. Since we raised the point with the Minister of State, the problem has expanded. Deputies Denis Naughten and Michael Fitzmaurice spoke to me when they heard this issue was coming up in a Topical Issue debate. I also had a call from Councillor Eugene Murphy in Roscommon. He is chairing a group on the issue. This extends from Mayo to Roscommon, taking in parts of Westmeath and, according to Deputy Brendan Smith, parts of Cavan.
Last June and July, people bought petrol in good faith from legitimate retailers. Serious problems arose with their cars and, in many cases, their engines have been destroyed and the cars rendered unusable. These are people who do not have money to buy new cars and do not have money to make the necessary repairs. These people have spent their lives abiding by the law. Many of the retailers are reputable. Those with comprehensive insurance have been dealt with by their insurance companies. However, those people lost their no-claims bonuses, which had been built up over decades in many cases. Those with third-party insurance had no cover and have been left out of pocket. There is no compensation for them.
We understand there are at least 160 complaints with the Garda Síochána Mayo division, a figure that may have increased. The number of complaints made to the Revenue Commissioners is substantially less. An official of the Revenue Commissioners made a commitment at a public meeting to engage in public clinics in County Mayo to allow for investigations. Deputy Naughten has joined us, and I presume the same is true in County Roscommon.
The point made at the previous meeting was that the major problem is trying to find the source. Delays in the State Laboratory are adding to the problem, because of the lack of resources. Staff at the laboratory are also dealing with other issues. If a car is off the road, if a person cannot go to work or must pay for a taxi to get to work, if they face a bill of thousands of euro to repair their car or if their car has been rendered useless, this is their biggest problem. If I had green diesel in my car when I was picked up by Customs and Excise officials, they would have initiated a prosecution against me and they would be able to find the source straight away. Where Customs and Excise has traceability from the retailer back to the wholesaler, and when all the cases referred to the Garda Síochána include the names of specific retailers, how have the Customs and Excise officials and the Garda Síochána not been able to use traceability to find out who caused this? No one is being held responsible, while hundreds of people have been desperately inconvenienced. What is happening in respect of State Laboratory two months after the Minister of State first engaged with the matter? Is there any prosecution pending?
With regard to third-party insurance, people have paid a lot of tax over the years when buying petrol. Is there a compensation fund that can be set up out of the amount of tax paid? Can the model of the Motor Insurers' Bureau of Ireland be used to fund people who are out of pocket through no fault of their own? It is not as if they deliberately destroyed their cars. This occurred through suppliers they had used for many years. People are incredibly frustrated and angry and feel let down by the various organs of the State in Mayo, in Deputy Denis Naughten's constituency of Roscommon, and in Westmeath, Cavan and elsewhere.
I thank Deputy Dara Calleary for raising this matter. He had already acknowledged the presence of Deputy Denis Naughten in the Chamber. Deputy Naughten raised the issue previously, most recently when we were discussing legislation.
I echo the sentiment of Deputy Dara Calleary about the sheer frustration felt by people who, through no fault of their own, have seen serious damage done to their cars and their cars written off. This has a devastating impact on families' lives as they go about their daily business.
All forms of fuel fraud impose risks to consumers' vehicles, legitimate businesses and the Exchequer. Accordingly, both the Revenue Commissioners and the State laboratories are directing their resources to tackle the issue. Revenue has, over the recent past, received reports from a variety of locations around the country of problems relating to petrol quality, and suggestions that these problems are attributable to petrol stretching. Revenue investigates all complaints of this kind and fuel samples are taken from filling stations and referred to the State Laboratory for analysis where the investigating officers have reason to suspect excise fraud. The State laboratory makes use of an array of tests to determine whether an adulteration of the petrol has occurred.
A total of 79 samples of petrol from filling stations in the Border, midlands and western region have been referred for analysis to the State Laboratory following checks conducted from June 2014 to date. Conclusive results have been received in one case which confirm contamination through the presence of kerosene, and a file is being prepared for prosecution in this case. A second positive contamination result is currently under investigation. I expect progress to continue. To date, no evidence of fraudulently contaminated petrol has been found in the remaining samples. In addition to analysing samples referred to it, the State Laboratory is providing technical and scientific support for the ongoing investigations.
The analysis of potentially stretched petrol is a complex one which, to date, has involved a significant level of time-consuming, non-routine testing, and it requires further investigation. It is appropriate that such a level of time is attached to such an important matter. The volume of samples sent for analysis has necessitated a reallocation of resources within the State laboratories.
As with many other Civil Service offices and Departments, both the Revenue Commissioners and the State Laboratory are subject to the employment control framework, and I do not need to tell Members about its impact on staffing levels over the past five years. However, the laboratory has prioritised the testing of all samples submitted in connection with the petrol stretching issue, and all staff who have the necessary experience and expertise in this area are currently being deployed to work on these samples. I welcome that prioritisation.
Petrol stretching is an offence under section 102(1A) of the Finance Act 1999 and carries a penalty on summary conviction of €5,000 or, at the discretion of the court, imprisonment for a term not exceeding 12 months, or both. If it is an indictable conviction, the fine is up to a maximum of €126,970 and the prison term is up to a maximum of five years, or both.
If Revenue's investigations and the analysis of fuel samples by the State laboratory indicate the presence of illegal stretching agents in petrol, Revenue will take action and pursue prosecutions against offenders where possible. As part of Revenue's normal operating procedures, fuel delivery tankers are challenged when encountered by enforcement officers throughout the Border, midlands and western region. No cases of contaminated petrol have been identified as a result of these checks from June 2014 to date.
Motorists should report any suspicions to the Revenue Commissioners, which has recently launched a dedicated section of its website specifically dealing with the shadow economy. This includes a reporting facility for anyone who has information about shadow economy practices, including the adulteration of fuel. I encourage everyone to make use of, and promote, that facility.
Deputy Naughten has made that point, and I will ensure it is rectified so that it is more prominent on the website.
The matter is treated as a priority and I assure the Deputy that both Revenue and the State laboratory are currently doing everything that can be done, including the reallocation of resources where necessary to tackle this serious issue.
I thank the Minister of State for his response. I appreciate the point about the reallocation of resources. To a certain extent, the difficulty is that the horse has bolted. This happened in May and June. The Minister of State says that fuel delivery tankers are challenged when encountered. How many times has this happened? Is there a plan in place or is it just when enforcement officers come across a tanker while driving around? How many encounters have we had throughout the summer?
Specific retailers have been named to the Garda Síochána and the Customs and Excise. Has traceability from the retailer to the wholesaler been initiated? Has analysis of the traceability been initiated to get back to the source? If the retailers are abiding by the law, they must have detailed records of where they buy fuel.
With regard to compensation, those with third-party insurance are left without anything through no fault of their own. It is not as if they went out and caused an accident. People with fully comprehensive insurance will pay the price through a much increased premium next year for having had to make a claim through no fault of their own. I cannot bring home the level of frustration and anger felt by people who feel the system has completely let them down. They are involved in this through no fault of their own, which I emphasise.
All they did was buy a tank of fuel, as we all do every day. They went to the same retailer as always, as we do every day as well. These people are being put through the mill. As an example, a 78-year-old lady used her car for shopping, socialising and going to mass but her daughter had to move home from England to facilitate these activities using a rented car because they are not in a position to make the necessary repairs to the car. That is typical of hundreds of people put in this position. I ask the Minister of State to give this absolute priority. The pressure should come from him and from the Minister for Justice and Equality so that somebody can be held to account and those who are suffering can be compensated.
I thank Deputy Calleary for raising the matter, the seriousness of which is not lost on me or any Member. I have acknowledged the devastation this has caused for people who are going about their business but who through no fault of their own have found themselves in this position. The Deputy asked a couple of very specific questions about how many times we have had such encounters and I will revert to the Deputy on that. I will also ask for details to be provided about traceability and that the issue of compensation be explored.
As indicated at the outset, the State Laboratory has prioritised the testing of all samples submitted in connection with the petrol stretching problem. It is an important statement of intent from our State agencies that we really want to get to the bottom of this. If it is possible at all to pursue a prosecution, we should get it done. I will also ensure that a copy of this debate is sent to my colleague, the Minister for Justice and Equality. I will pursue this with her, as I am sure colleagues on all sides of the House will do. There is an important finance element relating to the Revenue Commissioners but it goes across a number of areas, including the Department of Justice and Equality.
The first point of contact for motorists whose vehicles have been affected should be the motor insurance companies. I understand from Insurance Ireland that each insurer investigates individual cases with regard to damage done to car engines because of petrol stretching. It is a matter of whether this financial loss is included or excluded under the terms and conditions of the individual contract and I take the point that Deputy Calleary makes regarding third-party insurance. I understand some insurers are paying out for these claims and it is important to note that anybody with an unresolved insurance complaint can refer the matter to the financial services ombudsman for investigation and adjudication. Persons affected should also contact the point of purchase of fuel and if the customers remain unsatisfied, they have recourse in civil remedies and should seek legal advice.
We all need to up our game with this issue, including the agencies of the State.