50% of Northern Ireland’s fuel is illegal

Fuel laundering is so rife in Northern Ireland that three of the big fuel companies have pulled out. That’s the remarkable claim made by Ray Holloway of the Petrol Retailers’ Association.

“Government figures in 1998 showed that around 50 per cent of expected fuel tax revenues were missing and it has still not recovered today,” he said. “That is why the fuel companies pulled out. The reason is smuggled and laundered fuel and it is a major problem, with no end in sight.” He is to give evidence on the problem to the Northern Ireland Affairs Committee in February, but said that without political will, nothing is going to change. “In 1998, the Northern Ireland Affairs Committee made 28 recommendations to deal with the problem, but almost none of these has ever been implemented,”

Philip Bradfield continues:

Esso, Shell and BP confirmed they no longer own filling stations in Northern Ireland, only allowing licensees to use their names and logos. All three, which continue to own filling stations throughout Great Britain, cited “economic” reasons for their Ulster withdrawal.

Such rent seeking activities are not unique to Northern Ireland. They are common to both corporate monopolies and instances of political corruption. It’s only more recently that the theory has been co-opted to explain the nature of organised crime and its corrosive long term effect on the wider economy.

More in the Daily Telegraph.

  • Henry94

    Anyone who lives anywhere near the border or drives south at all buys their petrol in the south because it’s cheaper. That is not smuggling or laundering and it accounts for most of the missing revenue.

    The utter stupidity of charging more in the north and then whining and whinging over the inevitable consequences amazes me.

    What is it about market forces that these people don’t understand.

  • Shore Road Resident

    Crossing the border to buy fuel undoubtedly accounts for a part of the ‘missing’ sales – but it can’t possibly account for more than a fraction of it.

  • Mick Fealty

    Henry,

    That is an important corrective. And it may be that the operation of the market in the border area could have been enough to chase the companies out.

    But 50% is a hell of a chunk of revenue missing. As SRR points out, what proportion can realistically be laid at the market’s door?

  • Henry94

    what proportion can realistically be laid at the market’s door?

    I would say all of it. Even smuggling is the markets way of telling a state that it is overcharging.

    The mistake people make is thinking somebody can simply order an end to it.

    As long as there is money to be made from it there will be smuggling. It happened at the height of the British military presence in the border area and it will continue to happen.

    In my view anyone who is not talking about a tax based solution isn’t serious about the problem. Nothing else will work. Ever.

  • padraig

    “Economic forces” also seem to have led to a significant reduction in the number of petrol stations over here in England; I imagine that here this is due to the competition from supermarkets. Is this a potential factor in NI? I can’t remember from my visits back home whether supermarkets in NI are selling fuel as we buy fuel across the border 😉

  • mark

    “We make virtually no profit on the fuel we sell”

    I think that might indicate why they don’t run filling stations. They have drastically reduced their ownership in England also, there they blame discounted supermarkets petrol pumps.

    This is another pitch from retailers in an overcharging sector that has an alternate cheaper suppler close by (Republic) for state aid.

    The real way to resolve their woes is an all-Ireland economic solution but instead of addressing the real cause of their problems it’s so much easier to make exaggerated claims of smuggling and blame it on faceless criminality.

  • seabhac siulach

    If the Brit. govt. was serious about stopping smuggling, then it could address the issue by lowering the fuel taxes in the six counties (as a special case). No other part of the UK lives with such a price differential (18p for each litre) on its doorstep.
    By lowering fuel prices to the same as those in the 26 counties they could hope to recover at least some of the 50% now lost in revenues. That money that used to be spent in the south would now be equally spent in the north. They would recover money now lost altogether due to smuggling and people choosing to fill up south. They would also remove the main source of income for the smugglers at a stroke, thus removing all that ‘criminality’ we have been hearing about lately…
    It would be a net gain for the six county economy, but no doubt, such tax equalisation on both sides of the border would be met with howls of anguish from unionists…for obvious reasons…in which case, the economy would again have to take a back seat to illogical (unionist) politics.

  • Betty Boo

    And worse still is to come for those poor multi- national giants when alternative fuel solutions move in. Then they have to limit their exploitations. No sucking dry, no squeezing out, less profit. My heart is bleeding. Meanwhile the Irish Government seems already one step ahead to replace those missing taxes. They charge you for road use instead.

  • Jonny Cash

    We always have the benefit of crossing the border for cheaper fuel! Also ‘fair play’ if people in the North have found ways of getting fuel cheaper……. I can’t see anyone in the North losing sleep over the fact that the fuel companies have pulled out!

    Therefore this debate is slightly pointless!

  • John East Belfast

    Henry 94

    “In my view anyone who is not talking about a tax based solution isn’t serious about the problem. Nothing else will work. Ever.”

    Are you suggesting that the criminals who are selling smuggled fuel are only stealing the differential between UK & ROI Duty Rates ?

  • Henry94

    JEB

    Not quite. When you’re in the smuggling business you are obviouly not going to worry about other laws when it comes to sourcing supply. But it is the price difference that makes it worthwhile. Otherwise why not smuggle north to south?

    Let me offer you a quote for a Dail deputy in 1986 who was worried about the opposite “problem”.

    It would appear that an increasing number of people are going across the Border, to England and outside the country for their purchases. It is disgraceful to think that each day there are thousands of people crossing our Border and with no attempt by the Revenue Commissioners to check the goods that are purchased in the North. There does not seem to be a willingness by Government to tackle this major problem. I have absolutely no wish to suggest that Northerners should not shop in the South and that the Southern Irish should not shop in the North. It is essential if we are going to have coming together off the communities in both parts of the Island, that we should have the to-ing and fro-ing of a cultural nature and in an economic sense. Nevertheless, if we have a tax regime in the South which is so high, which precludes people from buying essentials in the white goods area, in the motor accessory and in the motor vehicle area, in the area of electrical goods of all kinds and in certain foodstuffs, and particularly in the area of detergent powders and so forth, there should be further checks on traffic on the main roads in and out of the North.

  • Betty Boo

    In 1986. Twenty years ago!!!

  • For the uninitiated, welcome to the surreal world of Gerry-cans, Gerry-mandering, and Gerry Adams. Its called norn iron. 🙂

  • wild turkey

    a few disparate points

    1. Pity the poor oil companies.

    Didn’t ExxonMobil just recently set a new record for corporate profits, announcing annual figures of $36.13bn (£20.4bn), up 42%. This inspite of spending $18bn in share buybacks.

    2. Given substantial differentials between the UK and other EU tax and excise regimes, smuggling into the UK-wide is endemic and will persist. Evidence? check out article in 31-01-06 Independent(UK) with the headline

    Tobacco firms told to halt smuggling.

    Does anyone know if the leadership of PRM (or their proxies) sits on the board of directors of, for example, British American Tobacco?

    3. When I do my laundering the washing machine spins. Anyone getting the sense of news management/spin on this issue? The Eric Waugh article Absent Trust, Suspicion and Instability Thrive refers to fuel laundering and associated criminality. The article, which asserts that as a result the crime busting eco-warriors of DUP can’t/won’t do business with SF coincides with a current rash of articles (check out Nuzhound) on fuel smuggling/laundering etc, etc. Why this? Why now? Like someone said re Hearts and Minds, it ain’t rocket science.

    4. If smuggling, criminality and the arising negative impacts are a real concern…and assuming that opium processing is not an industry indigenous to NI, can someone refer me to Eric Waugh’s article(s) on the human cost and damage of the smack problem in Ballymena?

    Thanks in advance. i’ll file that article under smuggling/criminality (costs thereof).

    Apologies if this last point seems a bit off thread, but I doubt if the underlying concern in these articles is smuggling and attendant costs

  • Shore Road Resident

    The problem is not that oil companies are losing money but that criminal rackets are gaining that money – and hence becoming entrenched.
    If the profit from fuel smuggling was going to help the wee poor orphans then the various attempts at distraction posted above might have some merit. But it isn’t and they don’t.

  • Henry94

    Shore Road Resident

    Your solution please.

  • smcgiff

    How does the smuggled fuel get sold? Does it end up in conventional garages i.e. Maxol or is it sold from even smaller independent retail companies?

    If 50% is illegal, and a proportion of it is legally bought down south, then more than 50% is illegal. So, it would appear as if Protestant, Catholic and dissenter are buying illegal fuel.

    Is this because it’s cheaper or because discerning Protestants cant avoid buying smuggled fuel.

  • Shore Road Resident

    The solution – rigorous cross-border law enforcement.
    Everyone is talking here like duty differentials across land frontiers are a unique problem to Northern Ireland. In fact it is the absence of land frontiers in the rest of the UK that is the unusual situation. Other EU countries as small or smaller than Northern Ireland manage steep tax gradients across porous borders without descending into gangsterism.
    Henry94, would you as readily dismiss corporate tax evasion as the inevitable consequence of different national corporation tax levels – or is it one law for the rich and another for the poor mouth?

  • Henry94

    SRR

    The solution – rigorous cross-border law enforcement.

    Not really a serious option. All the queens helicoptors and all the queens watchtoweers couldn’t stop it.

    Henry94, would you as readily dismiss corporate tax evasion as the inevitable consequence of different national corporation tax levels

    Corporate tax evasion is not being used as an excuse for not restoring the institutions. Now if you could only find a way of linking it to Sinn Fein…

  • Russell

    Holloway’s comments were spun out of context and proportion by Tom Peterkin in an obvious attempt to undermine public reception to the IMC producing a ‘favourable’ report. Holloway made it clear that “oil companies were selling off property, not only in Northern Ireland, but also in England and Scotland.” He also made it clear that “full duty-paid fuel had been dropping since the mid-90s due to lower cross-border prices, fuel smuggling and fuel adulteration.”

    Indeed, lower fuel prices in the south is likely to be a huge factor in explaining the drop in fuel duty. Oddy, however, we aren’t given the figures to examine what percentage the drop is or what periods they are compared with. If it is recent, then is fuel smuggling recent too? The rest of the propaganda doesn’t add up. For example:

    “The trade is estimated to be worth £130 million a year and illegal petrol and diesel is thought to account for 50 per cent of road fuel used in the province.” – Telegraph

    “The dye is removed by adding acid to the fuel, which is then sold to drivers at a profit. Unless the acid is neutralised, the fuel can ruin engines.” – Telegraph

    If those two statements are true, then half the engines in the north are ‘ruined.’ Is that conclusion supported by engineering figures?

    Now we have this: “Police have long suspected the IRA of running a sophisticated cross-border smuggling operation.” – Telegraph

    But instead of supporting his claim with comments and facts from “police,” he turns instead to Ian Paisley Jnr to back up his claim: “Ian Paisley Jnr of the Democratic Unionist Party said: ‘My understanding is that the IRA is by far the biggest player in fuel crime here, and the Government hasn’t any idea how it is going to deal with it.'”

    tut-tut

  • Yoda

    How much petrol is supposed to be smuggled?

    Most reports of fuel smuggling seem to deal with diesel.

    How many cars in NI run on diesel?

    Could that really account for a 50% drop?

  • Conor

    50% eh? I’m obviously not looking hard enough.

  • Shore Road Resident

    “Not really a serious option. All the queens helicoptors and all the queens watchtoweers couldn’t stop it.”

    – they weren’t trying to stop it.
    Special orders in council brought forward specifically to target Slab Murphy were ignored to further intelligence gathering. It also seems obvious that the British government laid off the S. Armagh IRA until recently for ‘peace process’ reasons.

    “Corporate tax evasion is not being used as an excuse for not restoring the institutions. Now if you could only find a way of linking it to Sinn Fein…”

    Paranoia and self-obsession, Henry94. Both republicans and loyalists smuggle fuel – loyalists perhaps more so. However I suppose you can’t address the latter without looking like a hypocrite over the former.

  • Pat Mc Larnon

    The point I see is the fact that motorists from all over the northern six counties travel across Britain’s border to fill their tanks and in that respect they have to be heartily congratulated. I don’t remember these petrol executives getting too concerned when the traffic was the other way (and for quite a while the traffic was considerable).

    The other type of smuggling is the washed diesel variety. By all accounts this concoction rots the internal parts of the engine. Why anyone would go for the short term gain associated with this crap is anyones guess.

    The people responsible for the washing of the diesel have no qualms about dumping the poisonous residue at their arse thus putting lives and the environment at great risk. Thus these people are devoid of any sympathy. They are criminal gangsters.

    I would have thought that it was quite a simple task to dip every single petrol station in a relatively short period of time. But maybe it is preferable to leave the uncertainty around the actual amounts involved. After all even Slab eventually got a mention on this thread.

  • Henry94

    SRR

    Paranoid, self-obsessed, hypocrite yourself.

  • Shore Road Resident

    No – YOUR ma.
    Both you and Pat are instinctively and defensively assuming this is all about republicans. It isn’t. (And I only mentioned Slab Murphy ‘in the context’ of Army surveillance in S. Armagh).
    Fuel is being laundered and smuggled by loyalist, republican, ‘non-aligned’ and traveller gangs.
    Thanks to the need of certain people around here to defend anything even possibly or remotely connected to republicans, everyone gets off scot free – except the taxpayer. Henry94 even appears to be suggesting EU-wide flat taxes. What next? David Cameron at the West Belfast Festival?

    A responsible political party – especially one supposedly concerned with tax evasion and wealth appropriation – would address this matter as a straightforward case of an unacceptably high level of crime.

  • Yoda

    A responsible political party

    In your opinion, who would that be?

  • Shore Road Resident

    Any party that regards this as a crime problem to be solved, rather than a political issue to be strung out until doomsday.
    Which should cover just about all of them.

  • David

    The SDLP is a very responsible party. The party for nationalists in the North. The party that can deliver progress. The interests of the broad nationalsit community are inextricably bound up in the SDLP.

  • Shore Road Resident

    Yes, I suppose I must grudgingly admit that the SDLP position on this issue is entirely responsible – although that tone of that last post was a little creepy.

  • Yoda

    I must grudgingly admit that the SDLP position

    I’m curious only because you advocated “rigorous cross-border law enforcement.”

    Is that the SDLP position?

  • David

    Yoda

    Yes, the SDLP do believe in rigorous cross-border law enforcement. The SDLP speak for all the interests of the broad nationalist community in the north, not for any one particular section or segment of the nationalist community.

  • Shore Road Resident

    Yes, it is – the SDLP has called for the establishment of an all-Ireland Criminal Assets Bureau to target the problem on both sides of the border.

    But somehow I suspect that isn’t the answer you really wanted.

  • Yoda

    Yes, the SDLP do believe in rigorous cross-border law enforcement.

    David, you do sound a little robotic!

    Could you point me to their policy on this?

    Thanks.

  • Yoda

    But somehow I suspect that isn’t the answer you really wanted.

    Er…okay, my prickly friend.

  • David

    Yoda:

    SDLP CALL FOR RIGOROUS NORTH-SOUTH LAW ENFORCEMENT

    One third of CAB’s work has a North/South dimension. This is no surprise given the level of cross-border criminal activity.

    Although there is cooperation between ARA and CAB, this needs to be enhanced. For example, to date there have been no joint operations.

    The SDLP calls for close North/South working, including joint operations.

    6. Move to an all-Ireland Criminal Assets Bureau

    The best way of tackling North/South criminality is through North/South action. The SDLP reiterates its call for the creation of an all-Ireland Criminal Assets Bureau, with the same strong powers throughout the island.

    Yoda: The SDLP have a longer record on law enforcement. The SDLP is stronger on rigorous law enforcement than other parties that proport to speak for the nationalist community in the North, and have had a policy on it for longer.

  • Shore Road Resident

    Apologies Yoda, between Pat & Henry’s evasion and David’s party line I’m feeling a little suspicious myself.

  • Yoda

    Cheers, David.

    I’ll check it out.

  • Yoda

    No probs, SRR.

  • Henry94

    SRR

    Thanks to the need of certain people around here to defend anything even possibly or remotely connected to republicans, everyone gets off scot free – except the taxpayer.

    I think any fair reading of my posts would see that I was suggesting ways of dealing with the problem I certainly wasn’t defending it. Pat condemed it explicitly

    The people responsible for the washing of the diesel have no qualms about dumping the poisonous residue at their arse thus putting lives and the environment at great risk. Thus these people are devoid of any sympathy. They are criminal gangsters.

    and I agree with him completely.

    So in fairness you are arguing with positions that have not been put.

    Henry94 even appears to be suggesting EU-wide flat taxes.

    I haven’t thought or spoken about the EU all day.

    What next? David Cameron at the West Belfast Festival?

    Please, call him Dave.

    A responsible political party – especially one supposedly concerned with tax evasion and wealth appropriation – would address this matter as a straightforward case of an unacceptably high level of crime.

    I think that is what an irresponsible political party would do. Cracking down on crime is always item one on the agenda of parties who lack real ideas.

    If that route is followed we will still have the broblem as long as there is a border. If my proposals are followed the smugglers will be out of business.

  • Yoda

    I think any fair reading of my posts would see that I was suggesting ways of dealing with the problem I certainly wasn’t defending it. Pat condemed it explicitly

    The people responsible for the washing of the diesel have no qualms about dumping the poisonous residue at their arse thus putting lives and the environment at great risk. Thus these people are devoid of any sympathy. They are criminal gangsters.

    and I agree with him completely.

    Henry, I know you’ve often been accused here of toeing the SF line, which I believe is unfair. So I’m being genuine when I ask this: is there a SF policy that would reflect your (and Pat’s) comments?

  • Bretagne

    Pat – Agree 100%

    It shouldn’t also be beyond the wit of man to fit meters to every deisel pump and measure the amount sold by the owners versus the amount bought by the owners legitimately. THat would give you certainty within 2-3%.

    Also it would catch the ****’s who serve short measures.

    Even give the owners of the garages a grant to fit the meters and a lovely kite mark to underline the qulaity of the deisel.

  • niall

    I am from South Armagh and I am sick of the government and others trying to trample over our culture. Smuggling is a tradition that has been going on for hundreds of years in South Armagh, longer than orange marches. So just leave us alone.

    P.S You don’t have to be a member of the IRA to be smuggling

  • Pat Mc Larnon

    SRR

    ‘Both you and Pat are instinctively and defensively assuming this is all about republicans.’

    Re-read my post i’m not assuming anything, I quite clearly call those responsible gangsters. It was you who brought Slab onto the thread.

    ‘between Pat & Henry’s evasion’

    I have not evaded anything in my post and have even suggested a way around the problem. So in your world tacklimg a problem is evasion? How strange.

    I think that you see a certain name at the bottom of a post and behave in an instinctive knee-jerk reaction, try and get over it.

  • David

    One of the strengths of the SDLP as a party on an issue like this is that nobody can accuse them of having any sort of financial interest in oragnised crime.

    The SDLP can speak for the interests of the nationalist people as a whole, not the interests of some sub-section of the nationalist people.

  • Henry94

    niall

    Smuggling is a tradition that has been going on for hundreds of years in South Armagh

    If they were already smuggling it was a mad place to put a border wasn’t it 😉

  • Henry94

    Yoda

    Henry, I know you’ve often been accused here of toeing the SF line, which I believe is unfair.

    Thank you

    So I’m being genuine when I ask this: is there a SF policy that would reflect your (and Pat’s) comments?

    I don’t know. I has a quick look at the website and there is talk of all-Ireland tax policies but nothing specific I can see about this issue.

  • Yoda

    Cheers, Henry.

  • Comrade Stalin

    As seems to happen quite often on Slugger, people are conflating two separate issues. Particularly guilty of this are the “the bastard unionists are making the multinational oil corporations go out, let’s have a united Ireland and stop fuel smuggling” chuckies. Almost as bad are the “let’s make our tax system the same as the one in the South” nationalist types, who conveniently forget to propose making the Southern fuel tax regime (which incidentally hardly contributes to helping reduce greenhouse gas emissions) closer to the UK one.

    The 50% figure sounds like one plucked out of thin air. How on earth did they arrive at it ? It’s not like they went around all the illegal fuel depots and measured the quantities of fuel moving in and out. As others have said, this sounds like a corporate news management exercise.

    The principle problem that we have to deal with is the fuel laundering. They launder the fuel upon which no tax has been paid, by using chemicals to remove the dye which allows such fuel to be identified. The IRA or any other organization would be able to do this whether the border existed or not. They are exploiting the existence of the tax relief mechanisms built into the fuel tax system on both sides of the border. That’s why these “let’s harmonize our economies” arguments make no sense. The problem is nothing to do with partition. Please give us a break, these “the Guinness tastes nicer in Dublin therefore let’s have a united Ireland” type arguments are tiresome.

    The second issue is people buying fuel in the South instead of the North to take advantage of the cheaper prices. As Henry94 said there is nothing whatsoever illegal about this and it is not smuggling, the free movement of goods and services across borders is the whole bleedin’ point of having an EU in the first place. In any case, I’ve got serious difficulty believing this is a major problem. Most people in Northern Ireland live within a ten mile radius of Belfast. To get to the border, they have to make a 100-mile round trip to fill their tank up. Let’s be realistic, the savings are not that deep. Yes, folks in Newry or possibly even Derry might find it economical; but the bulk of us who reside in the eastern end of the country don’t. Certainly whenever you’re near the border you’ll nip over to fill your tank up, but the idea that people are streaming down there to get their petrol is nonsense.

    Never thought I’d see myself agreeing with an entire P McL post. Humpf.

  • Yoda

    the bastard unionists

    No-one has called unionists that. Re-read the thread.

    The 50% figure sounds like one plucked out of thin air. How on earth did they arrive at it ?

    Yes, these are at best fabricated figures that are being to build a political argument that would appear to be used to prevent a devolved assembly from taking shape. As someone else commented above, note the rash of these eco-warrior/ diesel laundering articles on sites like Nuzhound.

    The IRA or any other organization would be able to do this whether the border existed or not. They are exploiting the existence of the tax relief mechanisms built into the fuel tax system on both sides of the border. That’s why these “let’s harmonize our economies” arguments make no sense. The problem is nothing to do with partition.

    That’s simply incoherent: in one breath you insist it’s got nothing to do with the border, and in the next, you say it has.

    Perhaps we could start naming those “other organizations” as well? Oddly, not too many sources seem interested in them.

    Until they do, it simply looks a lot like spin.

  • la dee dah

    The figures would be easy to guesstimate. If you know how many vehicles are on the road you know how much fuel they should be using. You know how much revenue you make on each litre so divide the revenue you receive by that from each litre. Compare these to previous years figures.

  • Henry94

    CS

    who conveniently forget to propose making the Southern fuel tax regime (which incidentally hardly contributes to helping reduce greenhouse gas emissions) closer to the UK one.

    Nobody is ruling that out. Whatever happens would have to happen by negotiation. The point is thta the taxes remove the incentive to smuggle. Of course being the state that is losing out the northern hand would be the poorer going into the negotiations.

  • briso

    >Let’s be realistic, the savings are not that
    >deep. Yes, folks in Newry or possibly even
    >Derry might find it economical;

    I don’t think there is a single filling station of note left anywhere in Derry. EVERYONE within a twenty mile radius of the border buys all their fuel in the ROI. To do otherwise would be stupid. The rest fill up there whenever they possibly can.

    Can someone tell me (since half of you apparently must be up to this) where I can buy smuggled petrol? I’ve never come across it, at least not that I was aware of?

  • DerryTerry

    Living in Derry and travelling regularly to Donegal the explosion of petrol stations at the border villages of Muff (now has 5), Killea (now has 3) and Bridgend/Burnfoot/Burt (5 as well)is only reflceted by the closure of northern petrol stations on the Culmore, Letterkenny and Buncrana Roads (at least 6). No one in Derry, or amywhere along the border in my book, is buting petrol or diesel in the North, and why would they?

  • Bretagne

    DerryTerry :-

    Its about 6 yrs since someome joked that stations in Derry were selling petrol by the pint.

    Incidently many Brits going by ferry to and from France fill up on arrival in france and before getting back on the ferry

    I live about 1:15h from Muff which is my closest station – so its a bit incovenient – but as I often in your neck of the woods it is worthwhile to so a fillup – saving about 14 pounds a fill.

    When I need fuel North of the Mason-Dixon – I do though want to know that I am not buying some deisel/acid mix to put in my car. Customer migration to avoid tax is not the problem – I do it – even Tesco used to send CD’s ordered online from Jersey to avoid tx.

    I don’t though want some hood ***ing up the environmnent an lining his own pockets.