Gas stations offering very low prices are adding pressure on the government to address multi‑million euro frauds tied to pirate fuel operators. These schemes threaten the viability of compliant businesses that follow the rules, as illegal practices fuel prices pushed downward by evading taxes, especially the value‑added tax.
The National Association of Automatic Service Stations (Aesae), which groups sector giants such as Ballenoil, Petroprix, and Gasexpress, has alerted the tax agency to a surge in fuel tax dodging, particularly with road diesel. This year, the shortfall could reach around one billion euros, with earlier tax agency estimates placing it at about 700 million.
The board of directors of Aesae held a meeting last week with top officials from the National Office of Customs Investigation and Special Taxes and the VAT unit of the Tax Agency. They urged that anti‑fraud actions extend beyond the distributors and marketers who commit the fraud to include the gas stations that benefit from it, selling fuels at anomalously low prices and engaging in unfair competition against other service stations. Tax authorities acknowledge that gas stations purchasing this fuel also bear responsibility and that penalties could apply.
Three‑Month Moratorium
The government has unveiled reforms to the Hydrocarbons Law aimed at curbing the spread of these multi‑million euro frauds. The package was included in the year‑end omnibus economic measures but will not take effect until March 28.
A three‑month moratorium, according to the gas station sector, has caused fraudulent practices to spike as changes are set to be enacted. In recent weeks roughly a thousand of the 12,000 stations active in the market have been offering fuel prices below general minimum costs, effectively selling at a loss. The industry sees this as clear evidence of widespread illegality.
Aesae is urging the government not to wait until March 28 to implement the reform, but to apply the measures immediately. “If action is not taken now, the fraud could extend beyond March 28, as offending companies would adjust their methods to keep dodging taxes after that date, with substantial harm already in sight,” said the association representing automatic stations.
In the past weeks various industry associations have joined forces to press the government for additional measures to root out fuel fraud. The Association of Petroleum Operators (AOP, which includes major refiners such as Repsol, Cepsa, BP, Galp, Saras, and Gunvor), independent gas station groups (Aevecar and UIP), producers of alternative fuels (APPA Biocarburantes and Bio-e), and terminal operators (ATLiq including Exolum and Disa) are preparing a joint package of fiscal and operational steps to present to the government to end fraud.
Waiting for the Reform
The government has approved reforms that, among other things, strengthen the ministry’s power to sanction firms that fail to meet mandatory contributions or all taxes by stripping official operating licenses or taking urgent provisional measures, such as temporary suspensions, before any formal proceedings are completed.
The focus is on a new regulation for retail distributors of petroleum products, believed to be the area most prone to irregularities. Retail distributors will no longer be allowed to supply other distributors, effectively limiting them to a retail role rather than acting as wholesalers. When the Hydrocarbons Law was drafted in its earlier version, it allowed retailers to supply other distributors.
When this measure was introduced in 2015, the expectation was that it would improve sector competition and consumer prices through greater market openness for both operators and distributors. Yet, in practice, since 2015, the observed effect has been the opposite, according to government arguments.