THE GOVERNMENT has effectively ruled out a rebate system to farmers and other legitimate users of agricultural or marked diesel to combat fuel laundering.

Minister of State for Energy Fergus O’Dowd said such systems would be “vulnerable to abuse” and large-scale bogus claims and would also result in a “very significant administrative burden for the Revenue Commissioners”.

Labour TDs Ann Phelan (Carlow-Kilkenny) and Robert Dowds (Dublin Mid-West) called for the repayment system as the best way to tackle a problem costing the State an estimated €150 million in lost revenue.

Mr Dowds said it would be an “effective and obvious change” to harmonise the duties on green or agricultural diesel, currently 13.5 per cent and auto diesel at 21 per cent.

If the Government could not do this, he suggested stations should have to clearly display who their suppliers were and he called for measures to impose liability for the repair of cars damaged by laundered fuel.

Ms Phelan said the general consensus among farming organisation appeared to be “not to colour the diesel and to provide a rebate to farmers”. A recent joint raid by authorities on both sides of the Border uncovered a laundering operation capable of supplying diesel to 10 busy service stations for a full year. Ms Phelan pointed out that any seepage of fuel residues or chemical bleaching agents from this plant into the group water scheme “would have had serious consequences for humans, animals and the environment”.

Mr O’Dowd said the cost for marked or green diesel was taxed at €88.66 for every 1,000 litres, while the normal auto diesel rate is €465.70 for every 1,000 litres. He told the TDs “illicit use would be difficult to detect and almost impossible to prove”. The oil could still be laundered and UK-marked oil could also be laundered and “a move away from marking could only be considered if the UK were to do likewise”.