The illegal fuel has its roots in the Irish Republic but is available across the country from Scotland to Kent, according to Ray Holloway, director of the Petrol Retailers Association. The root of the problem is the high differentials in fuel duty (and therefore pump price) between the Republic of Ireland and the rest of the UK.
The issue has been raised frequently in Parliament and, it seems, the smuggling which previously has been an issue across the border between the Irish Republic and Northern Ireland has now hit the mainland.
Drivers fed up with high UK fuel prices are filling their vehicles with the cheaper fuel and ITV's 'Tonight' television programme claimed the cheaper agricultural fuel could wreck car engines. Last week, it is claimed a 56,000 litre shipment of cheap fuel arrived in Liverpool and is selling at 22p a litre.
Government figures reveal that HM Customs & Excise seized 584,000 litres of smuggled fuel in 1998/99 and 915,691 litres in 1999/2000. The Government estimated that the cost of fuel smuggling in Northern Ireland in 1998 was £100 million.
A recent adjournment debate in the House of Commons saw MPs press the Office of Fair Trading to play a greater role in arbitrating in disputes between oil firms and fuel retailers. The OFT is due to report on trading practices shortly.
Caroline Spelman MP for Meriden who tabled the debate on fuel prices said the distortion in the retail market caused by 'Britain's high fuel tax regime'. 'As fuel prices have more than doubled in the last 12 months, oil companies may no longer be able to absorb the impact of fuel duty cuts to profits,' she said.
The Government has made arrangements to destroy any vehicles seized by Customs & Excise that have been adapted to smuggle fuel, and is adopting a multi-agency approach involving bodies in both Northern and Southern Ireland to combat the problem.