Major oil companies in Spain are uniting to sound the alarm about a multibillion-euro fraud in fuel sales, warning that organised crime is entering the sector through pirate networks that avoid taxes and other mandatory charges. These illicit players can undercut legitimate firms by offering fuel at lower prices and achieving returns far higher than compliant competitors because they evade taxes that typically make up about 80% of the final price.
Top executives from Repsol, Cepsa, and BP — which oversee the three largest gas station networks in the market — have simultaneously warned about the spread of fraud in VAT and related charges. Industry associations estimate that the fraud now affects roughly a quarter of sector operators, about one in ten service stations nationwide, and last year caused a public treasury shortfall of around 1 billion euros.
“Focusing only on VAT fraud sounds innocent. That is the painter who goes home without invoicing. This is organised crime in a strategic sector,” said Maarten Wetselaar, CEO of Cepsa, at an informational forum hosted by El Economista. “With the money raked in by these networks, they will move into other sectors.”
Industry figures indicate that fiscal fraud in fuel sales reached about 1 billion euros last year, spanning VAT non-payment and evasion related to biofuels or financing strategic reserves. “The VAT fraud funds could build ten hospitals a year in Spain, while non-payment for biofuels could fund five hospitals. It is a national security issue,” warned Josu Jon Imaz, CEO of Repsol. He also highlighted environmental consequences of evading mandatory biofuel use, noting that fraud increases CO2 emissions by undoing gains from electric vehicles in Spain.
Several thousand of the roughly 12,000 operating gas stations are believed to be pricing fuels below general cost levels, effectively selling at a loss. The frauds extend across all financial obligations faced by sector companies, from VAT or excise tax arrears to evasions of mandatory contributions to the Strategic Petroleum Reserves Corporation (Cores), the Biofuel Certification Information System (SICBIOS), or the National Energy Efficiency Fund (FNEE).
Olvido Moraleda, chair of BP Spain, warned that the fraud raises serious concerns about competitiveness and deters investments. “Fraud affects our business environment deeply. We need immediate action. My aim is to attract investment to Spain, but these practices are undermining those goals.”
Urgent measures
Industry calls for urgent measures include requiring VAT payments before fuel leaves storage facilities to curb fraud opportunities, a system successfully trialed in Italy, along with monthly VAT settlements and stronger checks to promptly remove operators found committing fraud. The government is studying legislative improvements to act more effectively against these schemes.
The government has already begun reforming the Hydrocarbons Law to curb the spread of billion-euro frauds. The reform, included in a package of economic measures late last year, did not take effect until March 28. A three-month moratorium saw fraud practices surge before the changes were enacted, and industry groups say the trend continued after the new rules came into force.
The government’s reform strengthens the ministry’s ability to sanction companies that avoid these mandatory contributions or taxes by withdrawing official operator status or taking provisional measures to suspend activity. It also shifts focus to at-retail distributors, recognizing that irregularities are most likely to occur there. Distributors will be prohibited from supplying other distributors, effectively limiting them to retail roles. Previously, the hydrocarbon law allowed such distributors to supply other distributors.
When this measure was first introduced in 2015, officials argued it would improve sector competition and consumer prices by opening the market to both operators and distributors. In practice, however, the government contends that the effect since 2015 has been the opposite.
As the debate continues, authorities stress that enforcement and transparent reporting will be crucial to restoring fair competition and safeguarding public revenue. The industry emphasizes that comprehensive action is essential not only to protect the market but also to ensure environmental commitments tied to biofuels remain intact and to preserve long-term national energy security.