Michael Healy-Rae (Kerry South, Independent)
Link to this: Individually | In context | Oireachtas source

200. To ask the Minister for Finance in view of the estimated loss of over €200 million a year through the illegal sale of fuels, that is, washed diesel being sold as proper road diesel, if he will consider bringing in a quality assurance scheme nationwide which would guarantee the consumer the quality of the product that they are purchasing; and if he will make a statement on the matter. [37751/13]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am advised by the Revenue Commissioners, who are responsible for the collection of mineral oil tax and for tackling the illicit trade in mineral oil products that, while the introduction of a quality assurance scheme for fuel is not a matter for them, Revenue regularly reminds motorists and the public generally that, in addition to its impact on the exchequer and legitimate trade, they should be aware of the risks that the use of laundered fuel poses to their vehicles and that sourcing fuel in this way is funding criminal activity.

The Commissioners have introduced a comprehensive licensing and reporting system for fuel traders with the objective of identifying and removing illicit fuel from the supply chain and closing down the suppliers and retailers involved in the illicit trade by withdrawing their trading licences. These supply chain control measures are designed to make it difficult for fuel criminals to source marked fuel for laundering and to get laundered product onto the market. From their regular contact with fuel trade representatives, Commissioners are aware of a number of initiatives by fuel traders to provide assurance to customers about the quality of their fuel in response to the threat posed by illicit supplies. Such assurance can be provided only for fuel that is sourced through the legitimate supply chain and accordingly these initiatives and the supply chain controls operated by Revenue are mutually beneficial.

The legitimate trade can contribute to closing down the illicit trade by providing information on the outlets that are selling laundered diesel. Revenue chairs the Hidden Economy Monitoring Group (HEMG) and has established regional sub-groups of the HEMG to facilitate the reporting of information by traders through their representative associations. Retailers who suspect or have evidence that laundered diesel is being sold in their area should report this directly or through their representative associations to Revenue, and I would encourage the Deputy to avail of these channels. Any such reports are treated as confidential and are fully investigated by Revenue.

Revenue collects some €1.1 billion annually in excise duty from road diesel so the potential for loss of tax revenue from fuel laundering is very significant. However, estimating the extent of any illegal activity is inherently problematic and claims about the extent of this activity and the associated tax loss must be treated with caution. While it has not been possible to establish the cost of fuel laundering to the exchequer, Revenue recognises that fuel laundering represents a significant risk.

In response, Revenue has made action against fuel laundering one of its priorities and is implementing a comprehensive strategy to tackle the problem. In addition to the supply chain controls mentioned already, Revenue is working with Her Majesty’s Revenue and Customs (HMRC) in the UK on the acquisition of a more effective fuel marker. Revenue and HMRC signed a Memorandum of Understanding in May 2012 on a joint approach to finding a more effective marker for use in both jurisdictions. The final evaluation of submissions received in response to an Invitation to Make Submissions (IMS) is underway and the outcome of this process is expected later this year.

Revenue, in co-operation with other law enforcement agencies on both sides of the border, continues to intensify enforcement action against fuel fraud and this work has yielded significant results to date. In the past two years 106 filling stations throughout the State were closed for breaches of licensing conditions. Since the beginning of 2010, over 3.14 million litres of fuel have been seized and 29 oil laundries detected and closed down, including 5 oil laundries in 2013 to date.