Diesel firms hit by scam

TRADE in illegal diesel has reached an intolerable level, stripping up to $830 million annually from legitimate industry, oil companies said.

The Federation of Hong Kong Industries has urged the Government to move quickly to wipe out the black market, saying it should increase penalties and improve enforcement.

It said more than 200 operators throughout the New Territories were selling the fuel at up to half the price of legitimate diesel.

Black market diesel was also more damaging to the environment as it had a significantly higher sulphur content, said the federation, whose membership included almost all of the oil companies in the territory.

'The problem has grown to an intolerable level,' the federation's director-general, Vicky Davies, said.

'If stringent measures are not taken by the Government, this lucrative illegal business will continue to plague the territory.' A Customs and Excise Department spokesman said the Government had increased manpower and stepped up efforts to deal with the problem, including raiding illegal stations.

Ms Davies warned that not cracking down would pose a major environmental problem and cause substantial losses for legitimate oil companies.

The industry expects negative growth in diesel sales this year as a result of the burgeoning illegal market, compared with a more than five per cent growth rate in previous years.