Fuel scam is costing Europe countries over $4 billion in taxes

Article by Anita Panait, on August 29, 2013

European governments from the United Kingdom to Germany and Poland are losing between EUR100 million and EUR1.3 billion in tax revenues annually – a total amount of over $4 billion -- due to the rampant fuel theft and fraud in the region. One of those fuel theft cases involved MiRO site in Karlsruhe, considered as Germany largest oil refinery.

According to Bloomberg, the watchman the site would wait until a fellow security guard was out of sight before texting that it was clear to drive a 10,000-liter tanker of stolen diesel out the plant’s gates. He earned bribes of EUR300 ($400) for each of the 87 truckloads that went out of the site over a period of more than a year starting early 2011. The theft would have remained undetected if not for one of the three involved tank-cleaning company employees who was fired and informed police.

Similar crimes are becoming rampant in Europe maybe due to the fact that retail prices for diesel have jumped 52 percent since 2009. According to Bloomberg, refiners’ profits are also hit by the fuel scam.

Tom Noonan, chairman of the Irish Petroleum Industry Association and chief executive of oil retailer Maxol Group, remarked that the fuel scam in Europe is “undermining the fabric of the legitimate petroleum industry and the state, at a time when economic challenges have never been so great."

He added that this illegal activity has been allowed to grow to such a large scale unimpeded. To illustrate the extent of the scam, UK forfeited over GBP1.1 billion to fuel fraud in the 2008-2009 tax year while in Greece, the illegal fuel market has soared to EUR600 million a year. Tax fraud in Poland also surged by 47 percent from 2010 to 2012, according to an audit of more than 1,000 fuel traders and retailers. [source: Bloomberg]

Topics: europe

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