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Page last updated at 09:53 GMT, Monday, 17 October 2011 10:53 UK
Fuel thieves cashing in on 'perfect commodity'

petrol pump
Petrol is selling for half of retail price at some "pop up" stations

It is the perfect criminal commodity.

Almost everyone uses it and everyone is feeling the pinch as pump prices tick up past £1.35 a litre - a price point that police say is putting fuel at the heart of a massive black market in the UK.

Thames Valley Police say the increase in forecourt fuel theft - or drive-offs - now account for one third of car related crime in the area.

Superintendent Gilbert Houalla said some petrol stations are being targeted hundreds of times.

"When we do interview people, we arrest them and interview them...we ask why and basically the feedback is that there is a big market for fuel, there is a huge market for fuel," he said.

With 60% of total fuel price down to taxation, there is plenty of room for thieves to profit, a reality that HM Revenue and Customs (HMRC) officers say has lead to a new level of organised crime.

Police say some organised gangs have bought their own petrol tankers and vacuum pumps and literally sucked entire petrol stations dry. They timed their thefts to coincide with the refilling schedules for commercial petrol stations, emptying the storage tanks within hours of them being filled.

'Pop up' petrol

But fuel fraud investigators with HMRC say the primary source of black market fuel is "red diesel".

Red diesel is a subsidised fuel which farmers and building contractors are legally allowed to use for off-road vehicles such as tractors. It is dyed a telltale shade of red in order to differentiate it from regular road fuel.

Vehicles taxed for the roads are not allowed to run on red diesel.

Fuel facts
Petrol station forecourt
200 "pop up" stations found
£15m lost to "drive offs"
60% of fuel price is duty and VAT

HMRC officers say that in 2010/11, they have uncovered 23 large scale operations that are bleaching and filtering out the red dye in a bid to avoid detection - effectively laundering it for re-sale in a network of illegal "pop up" petrol stations.

In total, 200 "pop up" petrol stations have been shut down, 97 of them in Northern Ireland.

In the Belfast area, some were found selling diesel for less than 90p a litre - or half the retail price and still taking in a handsome profit.

Accounts found at one illegal petrol station showed that it was making £22,000 a month.

But officers warn motorists that they could pay a high price for cheap fuel.

Cars found running on illegal fuel, such as cleaned red diesel can be seized by customs officers or their owners subjected to a £500 on-the-spot fine.

Additionally, they warn that the chemicals being used to strip the red dye out of the petrol can badly damage vehicle engines.

Moral compass

The illegal fuel may be cheap, but there is also a moral question.

DUP MP Gregory Campbell, a former member of the Northern Ireland Affairs Committee who has spent years monitoring organised crime and paramilitary activity in the province, said cheap illegal fuel comes with a moral trade-off.

Mr Campbell said in many cases the big players in Ulster-based fuel crime are former paramilitaries who have graduated from funding terrorism during the Troubles to become profiteering fuel gangsters.

'Pop up' petrol station in Northern Ireland
Secret filming revealed steady business at a Belfast "pop up" station

"The type of people who are probably involved at the top of this are the terrorists of yesteryear who would like to be the oil barons of tomorrow," he said of the shift.

HMRC also said there is some evidence that organised criminals from Northern Ireland are attempting to shift their business to the mainland UK.

Quentin Willson, of the Fair Fuel UK Campaign group, said the price of petrol has reached the point where it is straining motorists' moral compass, helping to fuel the criminal activity.

Bankrupt hauliers

Mr Willson said people, especially small business owners, are having to choose between being law-abiding and not being tempted by bargain-priced fuel that they know is likely stolen and avoiding bankruptcy.

"To be good...and law abiding and go bankrupt or to steal fuel, and I'm not for a minute condoning that, but to be in such a situation I have to say, I've got to steal fuel to keep my business going."

Man with petrol pump
Red diesel intended for farm use is being illegally sold to drivers

The effect on business of fuel prices that have risen by a third in the past three years is borne out by research conducted for the transport industry that found that 75% of companies that instructed insolvency in 2010/11 cited the cost of fuel as the main reason for their situation.

Chris Hunt of the UK Petroleum Industry Association said the price hikes cannot be blamed solely on oil companies.

Mr Hunt said pre-tax petrol and diesel in Britain is the cheapest in Europe - it is the duty and VAT that are making it unaffordable for motorists and hauliers.

In a statement, the HM Treasury said fuel prices are the result of a range of factors and the retail price is ultimately a commercial decision. They said the estimated illicit market share for diesel in Britain has been reduced from 10% to 4% of the market in the last seven years.

Panorama: The Great Fuel Robbery, BBC One, Monday, 17 October at 2030BST and then available in the UK on the BBC iPlayer.


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