Feargal Quinn (Independent) | Oireachtas source

The Minister of State, Deputy Hayes, is very welcome. I thank him for explaining to us what is going on and the response to it. He provided us with interesting figures. As Senator Jim D’Arcy said, we are keen to encourage him to continue with the work.

The issue was first brought to my attention approximately three years ago by a garage owner who was so frustrated at a competitor who was undercutting him. Having been clearly identified as selling at a price that was way below what he could possibly have afforded, he was closed down but opened up again within 24 hours. The frustration of legitimate garage owners is evident. As Senator D’Arcy said, fuel laundering is not just limited to the Border areas. We thought it was confined to such areas but that is no longer the case. I am aware of a problem in Tipperary and Dublin and Senator D’Arcy referred to Tralee and elsewhere.

I have raised the issue on several occasions in the past year. The amount of criminal activity, especially around the Border area, but not confined to it, is something we must address as a matter of urgency. It is good to hear the Minister of State’s heart is in the right place but we need action. It is a fact that the State is losing millions of euro. Senator Byrne referred to a possible sum of €100 million. It is rumoured that the loss is between €100 million and €200 million per year, which is a significant amount.

An example is worth mentioning to outline a motivation for the crime. There are 35,000 l in a tanker of diesel. The profit from a full tanker, bought legitimately, is approximately €1,500. However, the profit from a tanker of imported diesel without paying the VAT is approximately €16,000. Punishment appears to be severely lacking. I referred briefly to a garage owner being concerned about a competitor. We appear to be severely lacking in appropriate action. My attention was drawn to the fact that one garage owner who was found with illegal diesel on his premises was fined just €3,500 and was instructed to close for 24 hours. Some garage owners who have been instructed to close for 24 hours are often open again within the 24-hour period. One could ask whether the punishment is adequate. It might be the case that the legislation is in place but it is not being enforced. We must examine how to redress the situation. The cost to the State is significant, as is the cost to individual garage owners who are trying to compete with such activity. It is such that it is making a mockery of legitimate trading in this country. How can legitimate traders survive in such an atmosphere?

Let us examine possible solutions. Other countries in the EU subsidise farmers for diesel use but in a considerably different way. Our current system only encourages criminality in diesel laundering and forces legitimate companies out of business through unfair competition. We are one of the few countries that use a system of colouring diesel to distinguish between diesel on which duty is paid and agricultural diesel. I firmly believe that we need another solution. It must be possible to come up with one. In the case of technology for counterfeit tobacco there is a new app which everyone could handle. I do not refer to diesel in this case but the app allows one to test a packet of cigarettes to find out whether it is counterfeit or if duty has been paid on it. I accept that it is legitimate in the case of cigarettes to bring them in for one’s own personal use but the amount of illegal sales of such cigarettes is significant. Likewise, there must be a technological solution in the case of diesel also.

I agree with the Minister of State that we need a cross-Border approach. However, there is an obvious difficulty precisely because of the Border. We must bear in mind that the dye can be removed from agricultural diesel by washing it. The simple answer, which is often the best one, would be to allow farmers to buy normal diesel and to make a subsequent claim for the amount they use for agricultural purposes. Farmers might be concerned about such a system but as Retail Ireland highlighted, the rebate scheme’s design should guarantee no cashflow loss to farmers, and to minimise paperwork the scheme should be linked to another regular agricultural payment scheme. It said the operation of the rebate scheme should be outsourced by way of a tender competition, thereby ensuring that it is administered not only at the lowest possible cost but at a small fraction of the current loss. Retail Ireland also called for the duty rates on agricultural fuel and motor fuel to be equalised in an effort to remove the profit margin attractive to diesel launderers. It said that a rebate system should be introduced through which agricultural fuel users could claim back duty paid. I concede that difficulties attach to such a solution but it is a better one than the current system. We do not have an answer at the moment but it must be possible to employ technology to that end. I understand the Revenue Commissioners are consulting with the UK on the introduction of a more effective diesel marker. I would be interested to hear whether progress has been made on the issue. Could the Minister of State indicate how far we have got in that regard? This is not the time to talk about the problem; we need action at this stage.

It is a serious problem that is causing and attracting criminality in an area where we can do something. I am not sure what the technology is but there are a few solutions and the Minister clearly has his heart in the right place. Enough people are saying we must do something about this so the Minister has the support not just of the House but of every legitimate trader in Ireland.