Oil consumption represents an important source of tax receipts. Much attention of stakeholders in the transport and fuel industries has focused on diesel laundering, the resulting unfair competition for legitimate traders and the associated tax loss from illicit consumption.
In recent years Revenue has taken a series of initiatives to address diesel laundering and to improve compliance in the oils area. From mid-2012 onwards, strengthened licensing and reporting arrangements for traders in mineral oils were implemented. A new monthly Return of Oil Movements (the ROM1) was introduced from 1st January 2013. This was followed from December 2013 with new reckless trading provisions that strengthen Revenue’s ability to address those traders involved in the supply of fuel to launderers.
This report assesses the changes in the oil market following these initiatives. The results show significant changes in the patterns of diesel and Marked Gas Oil (MGO) usage since 2013. Diesel usage rose 5% in 2013 and by a further 6.3% in 2014. Extrapolating trends pre-2013 against current clearances suggests that Revenue’s compliance activities may have been responsible for reducing MGO usage by around 40 million litres in 2014 (product that might otherwise have been laundered) and increasing legitimate diesel usage in a range of 245 million to 295 million litres per annum. This could translate into an additional €200 million in taxes and duties for the Irish Exchequer.