Fuel Marking International
Providing self-funding solutions to combat tax evasion & protect fuel quality
Fuel Distribution Problems
In the fuel distribution networks of countries all over the world there are problems associated with tax evasion and adulteration, resulting in significant financial losses and damage to the environment.
Adulteration / Blending
Adulteration is also a form of tax evasion where cheaper products are mixed into more expensive products and are sold at the higher price, such as:
- Kerosene (or paraffin) which usually have lower taxes, is commonly mixed into diesel (AGO) and sold at the higher price.
- Automotive fuels which are also commonly adulterated with petroleum waste products and bio-flammables.
Adulterated products have numerous adverse effects on vehicles, the environment, and fuel dispensing equipment.
Adulteration is common in environments where there are large differences in product prices as a result of tax subsidies or other unequal taxes on products, and expensive environmental control requirements for waste or by-product disposal.
Tax Evasion
Fuel tax evasion occurs in many different ways, such as:
- Smuggling: the importing of fuel for in-country use without the correct import duties having been paid.
- Diversion: the use of export fuel or subsidized fuel for purposes other than intended.
- Collusion: the collaboration between tax authorities and the taxpayer to extract personal gain from evading the law.
The national revenue authorities lose the taxes and the consumer bears the brunt of higher duties to compensate for the lost tax collection.
Tax evasion is common in all countries where fuel taxes are levied, and is particularly high in environments where:
- There are significant volumes of transit fuel
(i.e. fuel legitimately imported or produced for export purposes). - Similar fuel products have different prices as a result of different tax structures
(e.g. diesel and kerosene or subsidized military / government fuel). - Countries have remote borders, large coastlines, manual import-export
documentation processes and / or a low compliance culture.