CM reveals diesel scam in E London
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CM INVESTIGATION
by Miles Brignall and Rob Willock • Commercial Motor has uncovered a red diesel racket in East London involving the selling of duty-free fuel to unscrupulous hauliers at knockdown prices.
Over the past month undercover journalists made three visits to a secluded yard on the West Ferry Industrial Estate in Rainham calling itself "Mickey's Diesel". On the first two visits, we were supplied with "white diesel" for just 53p/lit by an attendant called Pete. When asked about the availability of red diesel straight into the tank he said it was difficult, claiming "Customs are all over us".
But last week, after checking that Customs officers weren't patrolling the area, the boss—known only as Mick— pumped 50 litres of red diesel into the running tank of our van, and charged CM just L 9.50—the equivalent of just under 20p/lit. Current pump prices for legitimate white diesel are around 66p/litre.
We had asked Mick to fill the tank. He replied: "What do you want—white or red? Customs were sniffing around just 15 minutes ago, but they've gone now. If you want 111010"—•red it's your risk—it's up to you."
After filling the tank and taking ..cash, he said: "Avoid going straight back On to the A13, because Customs might pull you up there."
While we were there a succession of vehicles, including 38-tonners, pulled into the yard to fill up with the cheap fuel. We also saw vans filling up large jerricans with red fuel.
Scientific tests carried out for CM on the red fuel bought at Mickey's confirmed high levels of Quinizarin—the chemical marker which, in addition to the red dye, identifies fuel on which duty has not been paid. What is in question is where Mickey's gets its white diesel from. The haulier says it's well known that the place to go for tax free diesel is South Armagh in Northern Ireland near the southern Ireland border. "There are fanners there who will sell it if you know where to look." He adds that one official told him that many Customs officers leave the location "well alone" due to the involvement of the paramilitary groups in the trade.
The excise duty and VAT on legitimately bought diesel adds up to 54p/litre, but Mickey is charging just 53p in total per litre to his customers. Sources suggest Mickey's Diesel has been in business for around four years and yields high profit margins. It almost doubles its money on red diesel sales.
El CM has handed a dossier of evidence from its investigation to Customs & Excise and will help it fully with its enquiries into Mickey's Diesel operation_ • A Liverpool haulier who was busted "years ago" by Customs for using red diesel in his wagon says its use in Merseyside is a serious problem: "People do use it and there are known sites in the city where you can get it," he says. "I want to run straight but many do it as they know they usually won't go down for it."
The haulier says it's well known that the place to go for tax free diesel is South Armagh in Northern Ireland near the southern Ireland border. "There are fanners there who will sell it if you know where to look." He adds that one official told him that many Customs officers leave the location "well alone" due to the involvement of the paramilitary groups in the trade.
• Ever since the huge increase in diesel prices started to hit hauliers, rumours concerning the use of red diesel have been rife around the industry. While it is difficult to get exact figures on its illegal use, Customs & Excise has reported a significant increase in detections since mid-1997. Some hauliers faced with the losing their businesses have used red fuel, tempted by the huge savings and easy availability. Hauliers often keep legal tanks of red in the yard to run refrigeration units on trailers or for shunters.
An increased use of concealed tanks on trucks has come to On attention. Several sources have reported hauliers having partitioned tanks—or a special tank fitted inside the tractor unit—often under the bunk. A switch inside the cab decides from which part of the tank the engine is supplied. If the driver is unlucky enough to be pulled over (there are only 17 road fuel testing units in the UK) a dip of the normal tanks should reveal nothing out of the ordinary. Once the driver is on the motorway he can switch over to red. The penalties for hauliers caught using red are harsh. In 1996 Geoffrey Naylor, the owner of Huddersfield-based Fridge Freight was jailed for six months after admitting evading £28,000-worth of duty by using a partitioned tank.