IRA diesel racket costs the State €150m in lost tax
Councils spend millions cleaning up toxic sludge left over from industrial-scale fuel laundering
IRA diesel-smuggling operations along the Louth-Armagh border are costing the State at least €150m in lost tax revenue a year, customs sources told the Sunday Independent.
There are 14 main gangs involved in diesel smuggling, all based within a small area west of Dundalk and all headed by former members of the Provisional IRA.
On top of the revenue losses, Louth and Monaghan county councils are spending millions every year in cleaning up the toxic sludge left over from the washing of the green dye from diesel.
Last week, Louth council revealed it was having to clean up 500 tonnes of sludge found at a disused quarry at Cavan Hill outside Dundalk. The total amount of sludge dealt with by Louth Council last year was 600 tonnes.
Gardai and customs sources say the diesel launderers are making so much money they have now bought or taken out leases on more than 200 filling stations around the country to sell their product.
The laundering operation involves buying kerosene and green agricultural diesel in bulk from Dublin Port and elsewhere and transporting it to depots straddling the Border. The diesel is pumped underground into Northern Ireland, where it is processed and the dye removed using huge amounts of cat litter or Fuller's earth, which has been imported in bulk from China.
Sources say the gangs have brought in help from professional chemists to improve the quality of the laundered diesel, and their product is almost as good as that supplied through legitimate trade.
Customs sources say most of the laundered diesel is then sold in the North, where prices are higher.
The industrial-scale 'cleaning' of green diesel and mixing it with kerosene, most commonly used as home heating oil, is taking place within a relatively small area of south Armagh. The launderers are increasingly using mobile plants on the back of container lorries and can process 4,000 litres of fuel per hour.
It is estimated the launderers can produce illicit diesel for around 70c per litre and are doubling their profits at the retail outlets, with even bigger profits in Northern Ireland, and are paying no tax.
The scale of the operation is undermining the legitimate filling station trade, with hundreds of outlets being forced to close in recent years.
The launderers are bulk- buying clear kerosene at around 60c a litre and mixing two-thirds to one-third green diesel with the dye washed out, resulting in a highly toxic sludge byproduct.
With tax and VAT on diesel at 57 per cent of the average price of €1.56 per litre, the smugglers are making vast profits, which customs sources estimate as "at least €150m" per annum.
The smuggling business is dominated by the former south Armagh 'brigade' of the Provisional IRA, which last month planted two mortars as a warning to the PSNI and UK Customs, which carried out 20 raids on premises in south Armagh up to April this year. During the same period, five major laundering plants were raided along the southern side of the Border.
The plants raided in Northern Ireland were capable of producing 45 million litres of fuel a year, and those in the Republic capable of producing 23 million litres.
Customs say the majority of the diesel is sold to the haulage trade, with the smugglers delivering tanker-loads of 10,000 litres to transport depots, often at night, and selling at discount prices well below those in the legitimate retail trade.
Legitimate hauliers who refuse to buy the illicit fuel are coming under pressure.
The tankers coming out of south Armagh at night often drive without lights, the drivers using night-vision goggles.
This is also causing a major danger to motorists in the area.