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20% of fuel oil in the Greek market comes from illegal trade

05 April 2012 / 16:04:10  GRReporter
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20% of transport fuel oil that is sold in the Greek market is fabricated and does not meet quality standards for fuel, according to a survey of the association of companies trading with fuels and refineries. Often, the transport fuel oil is diluted with heating or shipping fuel oil. Shipping fuel oil is not subject to excise duty as opposed to the fuel oil for passenger and freight cars.

The head of Hellenic Petroleum Yiannis Kostopoulos estimates that by itself alone the smuggling of fuel oil for shipping, which is mixed with fuel oil for road transport leads to losses of about 70 million euro per year for the country. His estimates are that this figure could jump to 150 million euro per year. He believes that these illegal practices can be stopped if excise duty on all fuel oils is introduced, to the amount of 330 euro per thousand litres of fuel oil whether for shipping, land transport or heating. 2% of petrol is also mixed with substances that increase its volume and worsen its quality. Often, pills are put into the storage tanks and increase the volume of fuel or petrol is mixed with ethanol, which is not taxed.

The study shows that many petrol stations offer fuel, which is a mix of legally purchased fuel and fuel from the black market. Thus, retailers have higher profits and avoid paying the excise duty. Another widespread fraud is the installation of special equipment at the petrol pumps registering more fuel than what is actually filled in the tank. In 7% of the inspected petrol stations violations were found that burden the end consumer with six to twelve cents per litre of purchased fuel. The most serious is the situation in the region of Attica, where the trade department at the Ministry of Development and Competitiveness found that 30% of the petrol offered has been mixed with undeclared substances.

As a result of these actions, the state loses hundreds of millions annually, dozens of car engines are damaged, and the illegal trade flourishes. According to recent estimates, total losses for the state from illegal activities in this sector are between 300-500 million per year.

Stopping the fictitious export of fuel to neighbouring countries is crucial in solving the problem of fuel smuggling, says the Deputy Executive Director of Motor Oil Ioannis Kosmadakis. To end the excesses, the government is preparing a bill to change the conditions of activity in the sector. One of the first changes is the installation of GPS systems on all vehicles used for the transportation of fuel oil and petrol in order to track them. Moreover, the permits for all vehicles for the carriage of petroleum products will have to contain the brand and the name of the owner to stop the phenomenon of "anonymous tanks." All fuels entering Greece will be specially marked in order to track them and control systems for input and output of fuel will be installed in all storage facilities in the country.

Tags: EconomyMarketsFuelSmugglingPetrolFuel oil
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