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Dublin: 10 °C Wednesday 19 June, 2013

Explainer: What is laundered fuel?

How exactly does diesel get ‘washed’?

Image: Danny Lawson/PA Wire

FRIDAY SAW THE seizure of more than 20,000 litres of laundered fuel at Dublin Port, while earlier it emerged that black market and retail crime is costing Ireland €861 million a year.

It’s estimated that one in every eight litres of diesel sold in Ireland is illegal.

But just what is laundered fuel? And why should it be avoided? TheJournal.ie asked the Customs Enforcement Manager for the Border Region Seán Kelleher just that.

Here’s what he told us…

  • Laundered diesel comes from rebated green fuel which is also known as marked mineral oil. It’s sold at a reduced rate of duty to commercial white diesel.
  • It’s green because it contains a dye made up of Solvent Blue and Solvent Yellow. The yellow dye is a European Union marker added to diesel to distinguish it from motor fuel.
  • The thing is, this dye is easy to remove using a bleaching agent – the most recent method of removing the dye is to use silicon dioxide, which can render the fuel colourless in two hours. The silicon dioxide is put into a tank of green diesel and a compressor is used to pump the air through.
  • The bleaching agents look like bags of cement, so you can imagine what they do to car engines if the laundered fuel ends up being sold on the garage forecourt. The heat of the engine causes the residue to solidify, causing serious damage. There are also environmental implications and a concern about waste products.
  • The agricultural diesel is subject to a special lower rate of tax, which means those selling the laundered version can profit from the difference. It’s estimated that for every 10,000 litres of laundered fuel, €5,000 profit can be made.
  • Last year customs officials seized 327,000 litres of laundered fuel and nine oil laundries. One oil laundering plant which was uncovered in Castleblaney in Co. Monaghan was capable of laundering 18 million litres of fuel per year. So far this year six oil laundries have been discovered.
  • Gangs based on the border move between the Republic and Northern Ireland to avoid detection. Some gangs have portable laundering facilities. They have vans that have the filter systems built in, and the cleaned fuel is then pumped into a waiting tank.
  • Fuel that is seized is recycled – it doesn’t go back onto the market.

If you suspect you’ve purchased some dodgy fuel, you’re advised to contact the Investigations and Prosecutions branch of Revenue Customs and Excise. You can find out more information here. Watch out for the prices.  Cheap fuel might be a very attractive option, but it may raise questions as to the quality of the product.

Irish petrol prices some of the world’s highest>

Black market and retail crime ‘costing Ireland €861 million a year’>

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Comments (40 Comments)

  • I still am amazed that fuel prices do nothing but go up even if oil prices drop fuel keeps going up and up ! All these middle men making a fortune off of us

    Reply
    • Don’t forget the Government takes about 50-70% of fuel sales, so the retail price of unleaded fuel is about 70c per litr.
      Many retailers get only a few cents of that.
      A lot of this money is still spent keeping a bloated Molly coddled public service that is still incredibly completely insulted from the economy and has contrived for itself a worthless measure of accountability that prevents anyone from being down graded or fired. The main offenders are the administrative grades. It has to stop. These people do not deserve our respect or co operation.

      it’s not the middle man you are being exploited by , its The Man, one of the many cruel ironies of Ireland today.

      think about a citizen being pursued by AIB for a personal guarantee on a tiger era loan, his own taxes given to the bank by the State are being used by the Bank to wipe him/ her out.

      Reply
    • Well said fitzy.
      I love that comment- It’s not the middle man, it’s the man.
      We’re getting screwed at every turn by our own government, but most people don’t seem to realise this. Any talk of reducing the size & cost of the state is construed to mean let the poor starve. When in fact, much of our tax money is featherbedding for Irelands most affluent, while the working poor slide further into penury.

      Reply
  • As I understand it, the cheaper green diesel is meant for agricultural machinery. Farmers benefit from the lower price but it is illegal to use it on road-going vehicles. So, why not get rid of green diesel altogether and just sell the commercial white diesel to everyone? Farmers could be allowed to claim back the difference just as there is a mechanism for claiming back VAT. Result: no more green diesel, no more of this criminality.

    Reply
    • Then there could be abuse of the system as more was claimed back than was used, ie use it in their cars but claim it was being used in tractors, claiming it back for friends cars. Plus, they would have to keep tanks of diesel at their farms which would be a big target for thieves. You didn’t think that one through did you.

      Reply
    • There is indeed a risk of theft. Theft of home heating oil takes place but there are ways and means of preventing it. The possibility of theft should not be a reason for not trying it. As regards farmers using it for their own cars etc., why not allow a certain level of allowance based on the farm turnover or something similar. Or why have any allowance at all? I think the idea should at least be explored in greater detail – it seems far better than the existing system.

      Reply
    • Cara 02/09/12 #

      @ Tertullian you make very good points, however it would be very difficult to come up with a fair system as many of the farms in rural Ireland are made up of several small parcels of land many miles from eachother, where diesel usage would be very high.

      Reply
    • @JJ . when was the last time you saw a farmer getting off a tractor next to you at a filling station.?

      Reply
    • What’s your point Will? Yes they keep green diesel at their farms for use in their farm machinery, if they had to keep large tanks of normal diesel at their farms it would be easy to say is was ALL being used in farm machinery while using in in their own, on road vehicles, or selling it off to third parties and claiming all the tax back.

      Reply
    • This makes so much sense! No more Custom checks With Garda checkpoints and no more cleaning up the sludge that is doing so much damage to our environment. look at the amount of money saved.

      Reply
    • you just said “Plus, they would have to keep tanks of diesel at their farms”

      Reply
  • Yes but who is buying it? I recently heard that a large branded forecourt in our area was caught selling dodgy fuel.

    Reply
  • Hauliers should be included in any rebate scheme. We are an export nation and a lot of our exports go out on the back of trucks. Also trucks
    Vans etc keep our shops, petrol stations , houses etc supplied with the essentials. Increased fuel costs lower the haulage sectors ability to compete and put Irish jobs at risk.

    Reply
  • An information campaign to show what washed diesel does to an engine would be very useful. People don’t realise that it destroys injectors and fuel pumps, expensive parts to replace.

    Reply
  • The price as it is, get used to hearing about laundered fuel.

    Reply
  • There are two groups of criminals at work here, those who launder diesel and those who put punitive taxes on fuel in the first place.

    Reply
  • The government need to do a few things to serioulsy reduce the sale of dodggy diesel:

    1) More custom officers checking the fuel on the forecourts.

    2) If a legit petrol station is found to have been using washed diesel then are closed down for a month. When they reopen, they’ve to publish on each fuel machine that they were caught selling dodgy fuel.

    3) Have a proper report and reward system. If you know where fuel is being washed and you report it you get a reward for it. It’s not publicised just either a tax break in your wages or something

    If it’s costing the state €861 million per year then i’m sure they can afford to hire more custom officers and give rewards out.

    Reply
  • denism 02/09/12 #

    Good point

    Reply
  • Reg 02/09/12 #

    Seize all the assets of convicted fuel launderers; farms, family homes, the lot.

    Reply
  • Petrol or diesel with no creases in it?

    Reply
  • Joe L 02/09/12 #

    There is no chance that laundering of fuel would be wiped out by abolishing green diesel when red diesel is available in Northern Ireland!

    Reply
  • n365 02/09/12 #

    Why should farmers get reduced rate diesel anyway? Why not other businesses ?

    Reply
  • Cheating seems to be endemic in Ireland.

    Reply
    • Yes Marian. It is endemic.
      But it always has been.
      The Irish on many occasions have had to resort to simple means of survival.
      May it be during the occupation of the British or indeed currently being repressed by an incompetent government.

      Reply
  • Stay away from the independent stations, pretty much all selling washed fuel via a network controlled by the Provos

    Reply
  • One fuel for all would put an end to laundering. Green diesel is for farmers only, let them claim back what ever their entitled to.

    Reply
  • Ehh, Monitor the supply of green diesel to farmers?

    Reply
  • Just like cigarettes if the tax wasnt so high it wouldnt be an issue .

    Id bet that since diesel topped 1.10 a litre and cigarettes went above 8 euro a pack that all the extra tax revenue from both has been balanced out by the increase in work customs have to do , generating no net profit for the government

    Reply
  • Simple solution . Put tachometers in all agricultural and construction vehicles and introduce an nct for them. For the hugh sums of money being lost at the moment. Surely the lesser of two evils is to get a few snivel servants to police it. If the farmers steal a little at least they will spend it locally and they can always be caught at a later stage. The revenue from the NCT could go towards pothole filling on rural roads.

    Reply

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