Monday 25 September 2017

How scandal of petrol stretching has ruined at least 2,000 engines

Padraic Deane, who broke the story, reports that new cases are being detected every day and asks: what is being done about it?

Nightmare for owners: unsuspecting drivers paying high cost as engines destroyed by the petrol-stretching scam
Nightmare for owners: unsuspecting drivers paying high cost as engines destroyed by the petrol-stretching scam
Stock photo: Man filling car with petrol

Petrol stretching, the lethal contamination of unleaded petrol with kerosene, has now destroyed or totally disabled in excess of 2,000 petrol-engined cars since we broke the story last August.

The total cost of damage is now estimated to be in excess of €7,000,000.

Petrol stretching has caused havoc, particularly in the west, north midlands and border regions. After surveying the auto industry in those regions last September, AutoTrade.ie estimated there were more than 500 cases of engines destroyed or disabled due to petrol stretching. That was five times a SIMI estimate a month earlier.

The spiral of new cases continued for weeks after that. However, despite the limelight moving off the issues, there are still new cases being reported every day. And that is leading to latest estimates that more than 2,000 petrol engines have been destroyed.

Dermot Hughes, managing director of Dermot Hughes Cars, main Toyota dealership in Roscommon, told me he has had seven new cases in the last 10 days. That includes four Toyota cars, as well as a Nissan, Ford, and Suzuki.

He believes most of these cases and damage stem from contaminated fuel during the worst period of petrol stretching last summer and autumn. However, he believes not all are old cases.

He cites the instance of one of the four Toyotas they investigated last week whose engine has been destroyed. Their records show the same vehicle had been checked thoroughly last December by his technicians after it had some symptoms of engine damage. It was found to be clear of carbon coking at that time.

It would appear this is evidence that some level of petrol contamination continues to exist. Mr Hughes also believes some car owners with damaged engines have only purchased petrol from so-called legitimate (established and branded) forecourts.

The issue has been raised in the Dáil but has had little more than lip service from Finance Minister Michael Noonan and junior Finance Minister Simon Harris. Most recently Mr Noonan answered questions from John O'Mahony, Fine Gael TD for Mayo, on four Connacht counties (excluding Sligo).

Mr Noonan said the Revenue Commissioners, who are responsible for tackling fuel fraud, had reports on petrol quality linked to 'stretching' from several parts of the country.

They say the total number of complaints for the four counties in question, from June 2014 to last week, was 78 (Mayo 43, Roscommon and Galway 34 each and Leitrim 1).

The Revenue Commissioners say each filling station was visited by their enforcement officers where fuel samples were taken and sent to the State Laboratory. In total, 300 samples from filling stations and other sources have been tested there.

The minister confirmed that two (from one location) contained evidence of prohibited stretching agents.

He said that following further tests by the State Laboratory, results indicated the presence of traces of road diesel in several samples taken from a variety of locations. There is no rational economic reason or fraudulent incentive for anyone to mix normal road diesel with petrol.

Speaking on RTE's Prime Time last November, Sean Kelleher of the Revenue's Customs Service, said they were carrying out supply chain analysis to establish if any suspicion or anomalous transactions had taken place. He also said they hadn't ruled out errors or off-spec fuel having come in to the system - it was one of a number of possibilities.

Mr Kelleher said it was unlikely that criminal elements were involved. However, he made the point that it was still a criminal act.

The damage is so severe that in many cases the engine pistons have melted and ended up coated in carbon. Kerosene is completely unsuitable to add to petrol and will damage an engine even more quickly than laundered diesel. In most cases one or two fill-ups of petrol contaminated with kerosene is enough to disable an engine.

The kerosene in petrol causes coking almost straight away because it's not burning the kerosene properly. This causes carbon deposits to build up in the head.

Common indicators of trouble include a lack of power, engine misfiring, knocking noise when you start the car and a 'check engine' light coming on.

Some insurance companies that used to cover engine and associated damage from contaminated fuel, now exclude it in their policies. Most motorists are not aware of that.

Many 'fully comprehensive' policies cover engine damage but claims will result in a loss of the no-claims bonus.

The insurers that will not accept such liability suggest that customers seek compensation from the fuel retailers where they bought it.

Everyone should keep receipts when buying petrol or diesel too, as the laundering of agri-diesel using sulphuric acid is currently experiencing a big revival. One source told us this is in advance of a new diesel dye that cannot be removed and which will soon be added by the authorities on both sides of the border to prevent further diesel laundering.

Besides hundreds of private motorists, there are also a lot of self-drive/rented cars including many 141/142 registrations that have been fitted with new engines.

The Revenue Commissioners/Customs and Excise and gardai say they accept there is a significant fuel contamination issue.

But it appears they have investigated 'petrol stretching' up to a point.

Car owners are already nursing massive garage bills of €4,000 - €5,000.

But there appears to be no visible activity taking place to stop the crime or to compensate them. This issue needs to investigated properly and transparently. People need to have clarity and confidence restored in where it is safe to buy petrol and diesel.

The victims of petrol stretching shoulder no blame so they should shoulder no financial hardship.

If a petrol importer has unwittingly distributed contaminated petrol, and then covered it up, they should be named under Dáil privilege.

A major price is being paid by genuine sectors of the retail auto fuel industry, some motor insurers (which will claw it back in higher premiums) and, in particular, thousands of Irish motorists.

Why hasn't the Minister of Finance asked the Motor Insurance Bureau of Ireland to investigate and establish if it is an issue for them to compensate thousands of affected motorists or if another compensation scheme, at least partly funded by the petrol importers, is put in place.

Remember, tax makes up more than 50pc of the cost of petrol.

Irish vehicle owners have a right to the protection of the State in assuming such highly-taxed essentials are not contaminated.

*Padraic Deane is Managing Editor at Automotive Publications, the country's largest specialist auto publisher. He has been representing Ireland for more than a decade as a juror on the 'International Engine of the Year' awards programme.

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