Hundreds of car engines still being destroyed due to fuel contamination

There are hundreds of car engines still being destroyed as a result of fuel contamination. And it was raised in D?il ?ireann yesterday (full text below) that two-thirds of reports to Garda? about petrol stretching have not been passed on to the Revenue Commissioners for investigation.

We have information  of several new cases every week of car engines failing due to fuel contaminations. It is accepted generally (but apparently not by the Revenue Commissioners or the Government) that petrol stretching was widespread for a period last summer and early autumn and this was the period where the damage was done.

The Minister of Finance told said in the D?il chamber yesterday: "In the test carried out by the Revenue Commissioners in the State Laboratory, 345 samples were tested. Only in two samples is there evidence of petrol stretching, as defined. And there is no economic point or advantage in mixing diesel with petrol, yet in many of the samples, the petrol is contaminated by diesel.
That is not petrol stretching - something happened in the supply chain which caused the adulteration or contamination but there is no profit in that, so the Revenue are examining to see if there is kind of connection with tax, but it is nor quiet clear that there is.
Now there is no doubt that something happened, there is no doubt that there was damaged caused to a lot of individual's cars, but there is not evidence that there was widespread petrol stretching as defined, but there was widespread contamination of petrol, but with diesel - and not with a low excise product to allow profit."

It is clear that most cars (mainly small and newer smaller to medium cars) failed more or less after one r two fill-up with this contaminated fuel, while other that may only have topped up once or twice are only failing now. A friend of mine discovered earlier this week that his Lexus IS200 is one of the latest victims of this contaminated fuel.

Compensation for victims of fuel contamination

We have the Law Society to compensate victims of rogue solicitors; the Central Bank of Ireland, Irish Stock Exchange and Irish Association of Investment Managers have the Investor Compensation Company; and so on...

We have very worthy compensation schemes for victims of crashes where uninsured drivers are involved; owners of houses and apartments damaged by iron pyrite, a redress scheme for the victims of surgical symphsiotomy, compensation for Thalidomide survivors, and so on...

We, the tax payers have been left to pick up the bill through a levy (over EUR1.5bn. and rising) on property and motor insurance policies for the collapse Insurance Corporation of Ireland (a subsidiary of Allied Irish Banks until it collapsed in 1985 with losses of over ?200m), the so-called temporary 2 per cent  levy (up to 4pc at one stage ofter the PMPA debacle) was converted into a full blown Stamp Duty in 1996. The latest reason to keep it going came in 2007 when taxpayers may be forced to pay over EUR600 million for the takeover of his insurance wing of the Quinn Group

A few months ago I read in the Irish Times that around 90 cent of a litre of petrol goes to the tax man while retailers get about four cent. Wholesalers and distributors share eight cent between them, leaving little more than 50 cent per litre to cover the cost of extraction, refining and transportation. The excise duty of fuel is levied on a per-litre basis and not as a percentage of the price, which means when the cost falls, the tax remains at the same level. VAT is charged at 23 per cent of the non-tax fuel price and does fall in line with other price falls.

So with the Irish Government through the Revenue Commissioners has been taking nearly 60 per cent of all the petrol the Irish tax-payers (including the victims of fuel contamination), surely there is a serious obligation on it to monitor and guarantee the quality of this fuel. The Government also has a massive moral obligation to compensate those with engines and other components damages due to such fuel contamination. These are key points and with the paper trail evidence that the Revenue Commissioners and Gardai have accrued on this, they should seek compensation from the fuel importers or failing that - levy them all a one off charge, and make it mandatory that a compensation scheme is funded by the petrol/diesel importers plus a a cent in every litre of duty already being charged. Fuel for thought?
Questions asked in D?il ?ireann about Petrol Stretching
Parliamentary questions were asked of the Minister of Finance in D?il ?ireann yesterday (April 1st. 2015) on the on-going issue of Petrol Stretching. Here are the full exchanges that took place between Deputy Denis Naughten TD, Roscommon South-Leitrim, and Michael Noonan TD, Minister for Finance.
6. Deputy Denis Naughten asked the Minister for Finance further to the meeting between Teachta? D?la, the Minister of State and senior officials, the progress, to date, on investigations into petrol stretching; and if he will make a statement on the matter. [12950/15]
Deputy Denis Naughten:  It has come to my attention that only about a third of the reports of petrol stretching that have been given to An Garda S?och?na have been recorded by the Revenue Commissioners. Even though I have highlighted this discrepancy before, nothing seems to have happened. It raises the question of the priority the Revenue Commissioners are giving to the issue of petrol stretching, in light of the devastating impact it is having on families and individuals who have had their vehicles destroyed.
Deputy Michael Noonan: I am advised by the Revenue Commissioners, who are responsible for tackling fuel fraud, that they are very aware of the risks posed to consumers' vehicles, legitimate businesses and the Exchequer by all forms of fuel fraud. The Revenue Commissioners have, since last summer, received reports from a variety of locations around the country of problems relating to petrol quality, and suggestions that these problems are attributable to petrol stretching. Petrol stretching involves the illegal addition of a low-tax commodity to petrol, and the motive of the criminals who engage in this activity is to profit from the sale of adulterated petrol, thereby defrauding motorists and the State.
The Revenue Commissioners have received 141 complaints to date, the majority of which originated in its Border, midlands and west region. Every filling station about which a complaint was made has been visited by Revenue Commissioners enforcement officers and fuel samples taken from them have been sent for analysis to the State Laboratory. In total, 345 samples of petrol from filling stations and other sources have been referred to the State Laboratory. The scientific analysis required is complex and time-consuming, and the State Laboratory has conducted an extensive series of tests and re-tests on the samples. Despite this extensive testing, evidence of the presence of prohibited stretching agents has been found in only two samples, both from one location. The conclusive results received from those tests have resulted in the seizure of the product, and files are being prepared with a view to prosecution.
Following a series of further tests conducted by the State Laboratory, results were received which indicate the presence of traces of road diesel in several samples taken from a variety of locations. This could indicate that petrol was contaminated with road diesel at some point in time. There is no rational economic reason or fraudulent incentive for anyone to mix normal road diesel with petrol. If the problems that have come to light were caused by unintended contamination as a result of diesel being inadvertently mixed with petrol at some point along the supply chain, there would be no Revenue offence involved. However, the Revenue Commissioners are investigating vigorously the possibility of tax fraud being associated with the identified problems. In any instances where the analysis of samples by the State Laboratory indicates the presence of illegal stretching agents in petrol, Revenue will take swift and robust action and pursue prosecutions against alleged offenders where possible. They have been working closely with An Garda S?och?na on this matter, and will continue to do so.
Deputy Denis Naughten:  The fundamental problem here is that because there does not seem to be a loss to the Exchequer, it is not really an issue for the Revenue Commissioners. In my constituency and the adjoining counties we have families that have had two cars destroyed. In some cases, the replacement car has also been destroyed by this practice. Something serious went on here. The Minister has said 141 cases have been reported to the Revenue Commissioners. Close to 400 cases have been reported to An Garda S?och?na, and we were advised by the Revenue Commissioners that if the information was given to the Garda it would then be passed on to the Revenue Commissioners. How can Revenue get to the source of the problem when up to two thirds of the reports that have been made have not actually been investigated by it? Will it not make it far more difficult to identify the source of the problem?
Even though there may not be a loss to the Exchequer, will the Revenue Commissioners act in the interests of the motorists who had their vehicles damaged and try and source where this fuel came from in the first place, whether it is diesel or some other contaminant?
Deputy Michael Noonan: We must distinguish between what may have occurred as a result of negligence and what may have occurred as a result of fraud. In the test carried out by the Revenue Commissioners in the State Laboratory, 345 samples were tested. Only in two samples is there evidence of petrol stretching, as defined. And there is no economic point or advantage in mixing diesel with petrol, yet in many of the samples, the petrol is contaminated by diesel. That is not petrol stretching - something happened in the supply chain which caused the adulteration or contamination but there is no profit in that, so the Revenue are examining to see if there is kind of connection with tax, but it is nor quiet clear that there is. Now there is no doubt that something happened, there is no doubt that there was damaged caused to a lot of individual's cars, but there is not evidence that there was widespread petrol stretching as defined, but there was widespread contamination of petrol, but with diesel - and not with a low excise product to allow profit.
Deputy Denis Naughten:  Here is the fundamental problem Minister and I accept what you are saying. Because as you you believe there is not fraud involved, it is not an issue for the Revenue Commissioners, but the difficulty is that at the very minimum there is negligence involved here - vehicles have been damages and families have been decimated by this particular action and the culprits need to be identified. If it is negligence, they are covered by insurance and the insurance companies should kick in here, but if the Revenue Commissioners have only got one-third of the reports that have been presented to the Garda?, how can they identify the source of this? Now what I want from you Minister is an assurance here is that Revenue will do everything it can to try to identify the source of the contamination, whiter it be negligent or whither it be fraudulent, and if the information cannot be used for a criminal prosecution, that the information will be made available for a civil prosecution. Secondly, why have we still got two completely different standards for the recording of the deliveries of fuel, petrol and diesel. If those recording details were similar, it would be far easier  at this stage to identify the source of the problem, trace it back, and ensure that people were adequately compensated.

Deputy Michael Noonan: I don't have the data to which the Deputy refers. It's news to me that complaints have been made to the guards about petrol stretching, that haven't been passed on to Revenue. If you have a file on it, you might provided and we'll give it to the Revenue Commissioners, and we'll let them investigate, if there is a way to investigate. But the central point as in the answer I've given is that if there is no fraud or if there is no intention of fraud, then it is outside the legal powers of the Revenue Commissioners. If there is no evidence of a criminal offence and if it looks like there was a contamination of a petrol supply by the addition of diesel where there is no obvious profit motive, then that's a different issue and it's not for the Revenue to solve it.