The watchman at Germany's largest oil refinery, the MiRO plant in Karlsruhe, would wait until a fellow security guard was out of sight before sending a text message that it was safe to drive a 10,000-liter tanker of stolen diesel out the gates.
His tip-offs earned him bribes of 300 euros ($400) for each of the 87 truckloads that were stolen over a period of more than a year starting in early 2011. The scam went undetected until one of the three tank-cleaning company employees involved was fired and informed police. Combined with evidence from a toll-booth camera, the revelation landed all four in jail in June.
The heist underscored growing fuel theft, smuggling and fraud in Europe, where governments from Poland to the UK are losing between 100 million euros and 1.3 billion euros in tax revenue a year. The crime is spreading in the region in part because retail prices for diesel have jumped 52 percent since 2009. Executives at eight of 10 refiners surveyed by Bloomberg say their profits are suffering too.
Fraudulent Share
While the European Commission, Europol, the European Union's law-enforcement agency, and Europia, the Brussels-based refiners' trade association, don't provide region-wide statistics on fuel fraud, data from individual governments show the extent of the crime.
Tax fraud in Poland jumped by 47 perc ent from 2010 to 2012, according to an audit of more than 1,000 fuel traders and retailers, Wieslawa Drozdz, a spokeswoman at the Finance Ministry in Warsaw, said by e-mail on July 24. Poland lost 3 billion zloty ($943 million) last year, according to the Polish Organization of Oil Industry and Trade.
The UK forfeited more than 1.1 billion pounds ($1.7 billion) to fuel fraud in the 2008-2009 tax year, according to a parliamentary committee report last year.
In Greece, the illegal fuel market has ballooned to 600 million euros a year, the nation's Finance Ministry said, without providing figures for previous years.
Europe's black market is adding to hard times for refiners as the lowest demand in two decades saps returns, according to the International Energy Agency. An average 11.6 million barrels a day of crude was processed from January through May in the region's richest economies, the lowest level for any corresponding period since 1989, the Paris-based IEA said in a report on July 11.
Refinery margins, the profit from turning crude into fuels such as diesel and gasoline, were about $4 a barrel in Northwest Europe last week, according to data compiled by Bloomberg. That compares with $8 a year ago and a peak $20 a barrel in September 2008, the data show.
His tip-offs earned him bribes of 300 euros ($400) for each of the 87 truckloads that were stolen over a period of more than a year starting in early 2011. The scam went undetected until one of the three tank-cleaning company employees involved was fired and informed police. Combined with evidence from a toll-booth camera, the revelation landed all four in jail in June.
The heist underscored growing fuel theft, smuggling and fraud in Europe, where governments from Poland to the UK are losing between 100 million euros and 1.3 billion euros in tax revenue a year. The crime is spreading in the region in part because retail prices for diesel have jumped 52 percent since 2009. Executives at eight of 10 refiners surveyed by Bloomberg say their profits are suffering too.
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"This criminal activity is undermining the fabric of the legitimate petroleum industry and the state, at a time when economic challenges have never been so great," said Tom Noonan, chairman of the Irish Petroleum Industry Association and chief executive officer of Maxol Group, a Dublin-based oil retailer. "Illegal activity has been allowed to grow to such a large scale unimpeded."
Fraudulent Share
While the European Commission, Europol, the European Union's law-enforcement agency, and Europia, the Brussels-based refiners' trade association, don't provide region-wide statistics on fuel fraud, data from individual governments show the extent of the crime.
Tax fraud in Poland jumped by 47 perc ent from 2010 to 2012, according to an audit of more than 1,000 fuel traders and retailers, Wieslawa Drozdz, a spokeswoman at the Finance Ministry in Warsaw, said by e-mail on July 24. Poland lost 3 billion zloty ($943 million) last year, according to the Polish Organization of Oil Industry and Trade.
The UK forfeited more than 1.1 billion pounds ($1.7 billion) to fuel fraud in the 2008-2009 tax year, according to a parliamentary committee report last year.
In Greece, the illegal fuel market has ballooned to 600 million euros a year, the nation's Finance Ministry said, without providing figures for previous years.
Europe's black market is adding to hard times for refiners as the lowest demand in two decades saps returns, according to the International Energy Agency. An average 11.6 million barrels a day of crude was processed from January through May in the region's richest economies, the lowest level for any corresponding period since 1989, the Paris-based IEA said in a report on July 11.
Refinery margins, the profit from turning crude into fuels such as diesel and gasoline, were about $4 a barrel in Northwest Europe last week, according to data compiled by Bloomberg. That compares with $8 a year ago and a peak $20 a barrel in September 2008, the data show.