Cash-strapped European governments have been fighting a parasitic drain on their tax revenues from fuel theft and the tax fraud that goes along with it. According to a report from Bloomberg, individual governments are losing anywhere from 100 million to 1.3 billion euros ($133 million to $1.7 billion at today's rates) due to the scams. The increase in theft and fraud is being blamed on a 52-percent jump in diesel prices.

Eastern European markets have seemingly been hit the hardest, with untaxed diesel estimated to make up 13 percent of Poland's market, while the Czech Republic estimates that 20 percent of the fuel its citizens consume is provided illegally. In Lithuania and Poland, fuel is selling for 1.34 euros per liter and 1.30 euros per liter ($6.74 per gallon and $6.55 per gallon), respectively, while across the border in Russia, it's 31.27 rubles per liter ($3.57 per gallon). This has led to a booming trade of both Poles and Lithuanians traveling across the border to purchase fuel legally, and a black market that's seen Russian gas sold locally for less-than-local prices while still turning a profit. According to Bloomberg, 25 percent of Lithuanians admit to buying illegal fuel.

Western Europe hasn't been immune to the scams, though. The Bloomberg piece opens with a bit on workers smuggling 912,000 liters of fuel out of a German refinery from the start of 2011 to last June. In Northern Ireland, black market diesel is 40 pence per liter lower than the UK's average diesel price of 1.42 pound per liter (converted to USD, that's $5.98 per gallon of illegal diesel to $8.33 per gallon of the taxed stuff).

As governments are a bit quicker to respond to things when their pockets are being lightened, several countries have tweaked their tax codes regarding fuel trades, closing the loopholes used by smugglers. Ireland has gone so far as to implement electronic monitoring for fuel movements. In Poland, the new coding is expected to slash illegal trade by 50 percent within four years.


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    • 1 Second Ago
  • 52 Comments
      buckfeverjohnson
      • 1 Year Ago
      I have a hard time seeing an avoided tax as a government cost.
      IBx27
      • 1 Year Ago
      Lower the gas tax, and people won't feel as much of a need to avoid it. That way, more people buy more gas legitimately and the tax revenue remains intact.
      Sir Duke
      • 1 Year Ago
      I live in Northern NJ, and find it amusing to see how NY residents become giddy at the chance to buy NJ gas. They are even to pay highway prices (usually the highest in the State). There are about 8 or 10 gas stations just outside the Holland Tunnel, basically they all have a license to print money. The difference in price for NJ and NY gas is in the taxes.
        Pj Taintz
        • 1 Year Ago
        @Sir Duke
        oh you are correct. I am one of them NY people who go to NJ to get my gas as much as I can, i know better than to pay highway prices though haha, also im up north not NYC so i come in in small towns not the parking lot known as the NJ highway system but when its 3.80 a gallon in NY it can be found for as low as 3.29 in NJ
      johnb
      • 1 Year Ago
      hard to feel sorry for the bloated whale tax collectors.
      Banf_1
      • 1 Year Ago
      I am forever wowed by Autoblog's limitless collection of stock photos. Where do they find these pictures?
      manure
      • 1 Year Ago
      Maybe Europe would think of shrinking its governments and raping their people less.
      Narom
      • 1 Year Ago
      Not exactly a new trick. It's been happening in mainland europe for donkeys years with all sorts or items. You get the french popping over into belgium for cigs and tobacco (tiny villages are turned into tobacconists) and the belgians cross the other way for alcohol.
      knightrider_6
      • 1 Year Ago
      I wonder if Canadians drive down to US to smuggle gas back to Canada.
      Marco Polo
      • 1 Year Ago
      Smuggling is a very ancient profession. In the not so distant past, whole economies were based on smuggling. Many famous families and institutions grew incredibly wealthy from organized smuggling. Smugglers are viewed either as hero's or villains, depending on what they smuggle, and whom they avoid paying tax or prohibitions. (Although the German refinery workers appear to be just thieves, rather than smugglers). Nobody likes paying tax ! But, almost every nation must have some form of tax regime to provide communal services required by citizens living in civilized societies. The great debate is how much tax should be levied, (or goods prohibited) and the degree of communal services provided. Most modern day smugglers, are just criminal opportunists, exploiting circumstances for personal gain. Better enforcement, simplified (and fairer) tax laws, more unanimity between neighboring states, helps to reduce the profitability of the smuggling trade. The best way to avoid paying tax on gasoline and diesel, (especially in Europe) is to invest in EV technology. (Buy an Opel/Vauxhall Ampera, Nissan Leaf, Renault EV, etc, or even a variety of hybrid : ) .
      Do Gier
      • 1 Year Ago
      Yes, the fuel prices in Europe are very high, so please tell Obama, that attack on Syria doesn't solve the problem... Anyway, the one of cheap fuel ways is Polish-Russian border. The "smugglers" use VW Passats B3 and B4, because they have big tanks (100litres). In thie year since may, you can't pass the border more then 10 times a motnh with full tank. When you will pass 11th time- you will pay excise tax from fuel which you have in tank... More Passats photos http://www.demotix.com/news/2041497/fuel-smugglers-protest-grzechotki#media-2041507
      johnbravo6
      • 1 Year Ago
      Good.
      PatrickH
      • 1 Year Ago
      Serves those countries right for raping their citizens at the pump.
        aatbloke1967
        • 1 Year Ago
        @PatrickH
        I'd rather have my healthcare government-subsidised than the fuel in my car. As such, I'm not suddenly faced with such proportionaly massive increases in energy costs every time some idiot decides to bomb a pipeline in Nigeria.
          RGT881
          • 1 Year Ago
          @aatbloke1967
          1) Monetary policy is fascist 2) Financial terrorists such as JPM, GS and others were allowed to directly participate in commodities market and artificially increase the prices through storing much needed supply in warehouses they owned. We have one in Romulus, Michigan that GS owns. Otherwise, the governments are screwed. Do you want to see what will happen? Observe India and its crashing rupee, confiscation of gold and other futile currency control mechanisms.
          rcavaretti
          • 1 Year Ago
          @aatbloke1967
          @ RGT Is it too much to just take the leap forward and say our current economic model is dog meat?
          RGT881
          • 1 Year Ago
          @aatbloke1967
          It's dog meat unless the world does something about it, but I think it's becoming increasingly obvious even to politicians that the underlying system, the nucleus, ECU is malfunctioning. Unfortunately, many people tend to be short-term thinking and its those people who are in power because voters want quick short-term fixes. So it's also the psychology.
          krona2k
          • 1 Year Ago
          @aatbloke1967
          Don't confuse them with logic!
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