Belfast Telegraph

Petrol scam costs insurers millions

Insurers have been forced to shell out millions to drivers whose cars have been destroyed in a widespread petrol stretching scam.

Six hundred car owners successfully claimed for the costs to be covered and another 250 claims are being processed with average bills for repairs at about 4,000 euro.

The Consumers' Association told a parliamentary inquiry into the costly scandal that by last December 308 official complaints had been made to gardai about cars and motorbikes wrecked by contaminated fuel.

Dermot Jewell said drivers are facing a loss of anywhere from 2-6,000 euro to get the car back on the road, or worst case scenario to pay for a new engine worth 10,000 for some higher spec makes.

"The means through which every possible avenue for redress to the consumer is closed, frustrated or denied must be reversed. There requires to be a restoration of balance," the consumer campaigner said.

"Not one consumer has knowingly or willingly purchased fuel that will, over a brief period of time, reduce their second most valuable asset (over that of their home) to a worthless piece of insured, uninsured metal."

The bill for motorists caught up in the petrol stretching scam runs anywhere from 1.7 million euro to more than 5m euro.

Most of the affected motorists were caught up in the scam after filling up in garages and petrol stations in border counties, the Midlands and in parts of the west, with Mayo being one of the worst hit areas.

Insurance Ireland, which represents the industry, said there has been a drop in the number of motorists reporting damage in the last two months.

That matches the view of Revenue's Customs and Excise inspector who have received only a handful of complaints since December and believe that the scam related mainly to a period from 2013 and 2014.

Experts claim that the tampered motor fuel on average is about 10% kerosene - the fuel used to heat homes but crippling for the engine of a car. It is widely available for around 72 cent a litre compared with petrol at current prices of around 1.35 euro a litre.

The Oireachtas Transport Committee asked Insurance Ireland to produce data on the claims made, those that were successful, those that failed and others rejected for third party policy reasons.

Industry sources say it takes up to a week to clean an engine blocked and damaged by the residue left from the kerosene. It creates a crust inside the engine, causing it to fail.

Some of the common indicators of an engine damaged by stretched petrol include a lack of power, a misfiring engine or difficulty starting, a low knocking sound and excessive pressure in the crank case.

Petrol stretching offences can result in fines of up to 126,970 euro and/or up to five years imprisonment if someone is convicted on indictment.


From Belfast Telegraph