Select Committee on Northern Ireland Affairs Appendices to the Minutes of Evidence


Memorandum submitted by BP Amoco plc


  We were interested to see that the Committee is conducting a short inquiry into the illegal sale of fuel oils in Northern Ireland. We know that you are taking evidence from interested trade associations but we also wanted to let the Committee know how BP Amoco's business is being affected by this illegal trade.

  For some time we have been very concerned at the large amounts of pirate loads which are being transported over the border from Southern Ireland and being sold at some dealerships at lower prices than regular product. Following last week's Budget changes to fuel duty, price differentials between the north and south of Ireland have reached an all time high, encouraging more smugglers to come north and more customers to go south. In some cases there are record differentials of 29ppl for diesel and 21ppl for unleaded. Naturally, our company-owned and managed sites obtain product through the proper, conventional routes as indeed do our dealers, to the best of our knowledge. They simply cannot withstand this type of unfair competition and are rapidly losing significant amounts of business.

  Attached overleaf is a chart which shows the impact on BP Oil UK's business since the smuggling took hold. This gives you a clear indication of the severity of the problem and the loss in revenues both to the company and to the Government in lost duties. Actually this was compiled prior to the recent Budget changes and so understates the current problem. This is company confidential information which is not for general publication. [2]

  Officials at HM Customs and Excise are aware of the problem, as are officers from the RUC. There has been some attempt by them to prevent such loads being brought over the border and we acknowledge the efforts and support we have had from the DTI, Customs and RUC officials, but the situation persists.

  We are rapidly reaching an untenable position at many of our sites in Northern Ireland. Should the problem persist long-term, closure of sites may be a very real option for us and some of our dealers and one which we would rather not face from both a business and social impact viewpoint. BP has had a retail presence in Northern Ireland for very many years and it is causing great business hardship now and would cause very great distress to us to close sites in this way.

19 March 1999

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