Diesel Fuel "laundering" in Ireland

I’m reading a novel set in Ireland in the early 2000s. It’s mainly about professional bank robbers and them having to pay the IRA “taxes” on their crimes. A subplot is about the IRA will have to get out of the diesel “laundering” business for political reasons and the professional thieves will take over.

We have some of this in the US, mainly using farm diesel, which is untaxed, for personal vehicle use. However, we have a small percentage of diesel vehicles here compared to Europe. As someone who used to sell several millions of diesel every year, I’m not sure how I could have even bought/sold farm diesel because it was dyed red and any person that bought it would immediately know it was illegal. Not to mention the state testers that showed up unannounced every year.

So was this a big money maker back then? How was it done? Is it still a problem?

I imagine it’s like selling tax-free cigarettes here in Canada. You don’t know how you’d sell this fuel because you assume you’d be selling it to people who would not want to be caught committing a crime (otherwise, why would they care about how they “would immediately know it was illegal”?)

But if you’re a criminal, or just criminal-adjacent, you probably know a lot of people who’d be quite happy to commit a minor crime to save a few bucks, particularly if that savings comes at the expense of The Tax Men. Particularly in areas where the IRA has a significant influence, which would tend to be even more anti-government than most places.

That’s how it goes with cigarettes in Canada. I know people who make regular runs to Native reservations on the US-Canada border, and bring back loads of cigarettes, which they sell to a network of acquaintances whom they know are inclined to pay less for their smokes. Everyone involved knows it’s illegal, but no one cares, because screw the tax man, they need smokes!

It is still a problem.

Here is an intrepid BBC reporter confronting dodgy diesel dealers who seem in no mood for conversation.

So none of it is in the open? As in right out on the store shelves? Because it seems to be openly sold in stores in NY. Back when I sold cigs, all the tobacco companies had reps showing up to check out all your inventory for tax stamps and expiration dates. Bribes, maybe?

With the diesel it seems like you would need a huge logistics system. Storage tanks, drivers, trucks and sellers that would all be in on the scam. That’s a lot of people to keep quiet.

So people run around with five gallon cans of illegal fuel to fill up cars? Doesn’t seem very efficient.

Some people don’t care, as long as they think they’re putting one over on “the Man.”

I don’t think the BBC budget ran to confronting the big fish in the dodgy red diesel game.

The tax rules regarding red diesel are due to change next year.

Fewer businesses will be allowed to use it and many will have to pay tax. I expect there will be some wailing and gnashing of teeth.

Growing up in a rural part of England in the 90s this was definitely a big part of the culture. Especially among the “travelers” we used to hang about with on occasion (Note: where I grew up this term was used to describe hippies who lived in buses, etc out in the countryside, not actual Romany who had no interest in hanging out with the local stoner kids). It was also taken far more seriously by the authorities than the other nefarious activities they would be involved in (mainly selling weed).

There were allegedly many techniques that could be used to remove the dye, but customs and excise men had very sophisticated testing system that could detect the dye even if it was no longer visible to the naked eye.

In the US farmers often have a larger tank on their farms -1,000 gallons, and a pickup with a 100 gallon tank on it. Is that how they get the fuel into the cities to fill the cans?

As far as I know, they don’t even try to remove the dye in the US. That must require a lot of extra time and effort.

Yeah I wouldn’t be particularly surprised if no one actually did it. This was all stuff “friends of friends” were rumored to do, nothing I, or most of my friends, was directly involved in, Much like the various alleged ways of circumventing the anti-theft features in car stereos at the time. No-one I knew actually stole car stereos or dealt with nicked stereos, but Franks mate Dave totally does and he swears that if you leave them in a freezer over a weekend it resets the security code.

The customs and excise interest in it was definitely a thing, so people were definitely using it (I suspect it was about as sophisticated as giving a farmer a tenner for a tank of diesel and no complex filtering was involved)

Not where I live. My brother who briefly smoked in grad school in Toronto in the mid 90s could get illegal cigarettes in some stores, but you had to ask the person at the counter for them, and if you were too-clean cut looking, they’d deny all knowledge of such mischief.

Yep, I think that was/is pretty common. I just wonder how it scales up to being a money maker for the IRA and organized crime.

If you pay attention to small items in the back pages of the New York Times, there is an occasional story about a bodega being busted for selling untaxed smokes. It doesn’t seem to be a high priority crime.

You make it up in volume.

Did you ever watch the TV show The Wire? The addicts would scramble to make $10 a day to buy some drugs, but the dealers were bringing in hundreds of thousands a week. Do a $10 deal often enough and it adds up.

Fuel probably isn’t as big a market as drugs, but even thousands a week is probably worth it, for such a low-effort crime.

From that link:

HM Revenue and Customs estimates that the crime costs the UK £100m a year in lost tax revenue.

Even if you only make 10% of what you’re costing the taxmen, you’re making 10 million a year. If I were a terrorist, I could do a lot with 10 million a year.

Yep, but drugs are a small package = lots of money. Fuel is always a large package and you need somewhere to store it until it gets distributed in smaller packages. Seems a lot harder to move around.

You could also make that case for alcohol vs drugs, and yet, smuggling and selling booze during Prohibition is what made organized crime what it is today.

My Grandpa used to run his car on red diesel, in England. He’s been dead a few years, so I reckon the statute of limitations is probably up.

According to my mother (this took place when I was tiny) apparently at the time it was allowable to use red diesel for home heating systems. He claimed he had a suitable heating systems, got a fuel tank installed in the garden by some dodgy mate, and got the fuel delivered at home. No-one ever questioned it when they saw the tank, though it wasn’t plumbed in, and he actually had no heating system at all, aside from a coal fire.

He quit doing it after he got stopped in a random check during a crackdown, then got waved through when they caught the car in front on something- apparently deciding that was a close enough call…

He also had two identical motorbikes with one set of plates, used a Saudi driving licence to bamboozle traffic police to avoid driving fines (he had a UK one as well, but he could legally drive on either) and probably was involved in quite a few schemes I don’t know about. I think it was basically a game to him to see how much he could get away with. He certainly didn’t need the money.

Sure, but we know how prohibition worked, where the booze came from, where it was stored and where it went. What I’m trying to understand here is the whole chain. Where does the untaxed fuel come from in the first place? Who goes to the pipeline and loads up 15,000 gallons of untaxed fuel? Is all the paperwork faked? In the US you have to be licensed to sell fuel. You can’t just show up at a pipeline and plop down the cash to buy a tank load of fuel.

Are road checks common? Or just a occasional thing to make it look like the government is doing something?

It’s somewhat common in parts of the US for older homes to have fuel tanks that are no longer used as they switched to natural gas. I wonder how often this happens here. As I said, the US has a small percentage of diesel vehicles, I’m not sure it would be a big thing.

I’ve never seen one (at least, not checking fuel) to the best of my knowledge. I think they were just doing a crackdown at the time- this probably would have been in the mid-late 80s.

Back when I used to run Drilling rigs occasionally we’d have people break in and steal the rug fuel. The roughnecks all drove diesels and stole as much as they could get away with as a matter of business but it wasn’t uncommon to see people driving around the field with a large tank in the bed of their truck looking for an unattended rig. Most of that diesel went out to the reservations.

Basically, the way it worked was steal ~500 gallons at a time and then drive to the poor neighborhood where people need fuel. They pull up in the parking lot and pay you $20 to fill up their tank. Eventually you run out of gas and go home to live on your gains.