Life and near-death for oilman in round - Downstream Magazine

FPS transport briefing – 2
Wetline contamination and illicit fuel
Pat Curtis,
National Oils Coordinator,
Road Fuels Testing Units, HMRC
THERE IS A DILEMMA posed by
Customs’ need to catch and convict fuel
launderers and the difficulties of
distributors whose delivery pipes show
traces of rebated fuel in full duty road
fuel.
“Without prejudice to any other action,
the fuel cannot remain in the market
place as road fuel and must be uplifted
and downgraded appropriately. The
Department has a zero tolerance
policy,” he said.
Pat spelt out the enormity of the illicit
fuel laundering business and the impact
on government tax revenues exerted by
organised criminal fuel launderers, with
easy exchange of information on the
internet and the easy availability of
marker removers.
UK oil receipts amount to
£26,197,000,000, with diesel making up
half that figure. If the illicit market share
of diesel runs at 5%, the tax gap would
be £684,350,000, he said.
Ingenuity and deviousness are rife
among organised gangs and Pat cited
several examples of split tanks, and even
a hollow chassis, as ways used to conceal
the illicit fuel. A new generation of fuel
extenders is adding to problems but
new detection techniques, Xray sulphur
tests, solvent tests and SET (silica) tests,
are helping the fightback.
In Northern Ireland, where a policy of
‘two strikes and out’ operates, HMRC
has actually closed and dismantled one
filling station, digging up its storage
tanks. While not on the face of it costeffective,
the deterrent publicity value
had made it worth it.
He estimated that seven out of 10
independent filling stations in Northern
Ireland had been selling dodgy fuel at
one point, but HMRC action has now cut
that to about 30%. A typical laundering
plant will process a million litres a year,
losing £600,000 worth of tax revenue to
Split tanks found in HMRC checks
(above). Below, a container full of
illicit fuel storage and work under
way on decommissioning a filling
station selling illicit fuel
the government and making the
criminals £400,000.
With duty likely to rise by about 30p per
litre according to some pundits, there
will be yet more incentive for criminals
to move into the laundering business.
Professional launderers would always try
to deliver directly to customers such as
taxi and transport firms, he said.
Even though oil produces more for the
public purse than tobacco or alcohol, it
does not seem to be on the political
priority radar.
CODE OF PRACTICE FOR MINIMISING
WETLINE CONTAMINATION
So will there be any tolerance for UK
distributors carrying split loads? Pat
explained that HMRC has run a
successful trial in Northern Ireland, the
area presently thought to be most
affected by criminal laundering, for
three years. There is no reason it can’t
work in the rest of the UK, he felt.
Essentially, distributors must calibrate
the total volume of the delivery
wetline system from the outlet valve
to the end of the delivery nozzle at
least every six months, or sooner if the
hose is damaged and repaired, or
replaced. The system is first primed
with kerosene and then changed to
marked gas oil.
Replacement is considered complete
when the first traces of marker are
seen. The volume must be recorded
and the information provided to the
driver through a label maintained as a
company record for the vehicle.
When the next delivery is a different
product, the driver should set the
meter for the volume to be delivered,
less the volume of the wet line system.
The driver should deliver the set
volume into the customer’s tank and
then change the delivery system to the
compartment containing the product
for the next delivery. The meter should
be set to the volume of the wet line
system and the delivery completed.
Paperwork should enable stock
reconciliation of the load and rapid
identification of any
contamination/mixing if it occurs and
identification of customers who may
have contaminated product.
“If you run this system, we will not
have a problem with you,” said Pat.
MORE INFORMATION
The Code of Practice for Minimising
Wetline Contamination can be found
in the Members’ Zone of the FPS
website www.fpsonline.co.uk.
Downstream Winter 2010 16 www.downstreammagazine.co.uk