The petrol "stretching" scam that has destroyed hundreds of new car engines this year is controlled by former IRA gangs based in south Armagh, the Sunday Independent has learned.

The petrol "stretching" scam that has destroyed hundreds of new car engines this year is controlled by former IRA gangs based in south Armagh, the Sunday Independent has learned.

The same gangs turned away from the once highly profitable "washing" of dye from smuggled diesel after Irish and UK governments agreed on the introduction of a fail-safe radioactive isotope dye at the start of this year.

They are now smuggling and selling huge amounts of adulterated petrol, which is destroying engines in new- model, high-efficiency cars at a cost of around €4,000 to €5,000 in repairs or engine replacement a time. Industry sources say it takes up to a week to clean an engine gummed up with the residue from the kerosene and methanol adulterants.

The south Armagh IRA smugglers are now lacing petrol with what gardai say is "Northern kerosene", the clear kerosene or paraffin which they buy cheaply in Northern Ireland and mix along with methanol to "stretch" legitimate petrol.

The current "stretch" is said to be 20pc kerosene and 5pc methanol per litre of "petrol".

At current filling station rates, it is estimated the Provos are undercutting the legitimate market by around 45c to 47c a litre and making €15,000 clear profit per 3,000- litre tanker delivery.

Customs and gardai have identified a number of filling stations around the country that were bought up by the south Armagh gangs with their multi-millions in profits from diesel washing.

Gardai say the bulk of the smugglers' income is now composed of the adulterated petrol and the simple smuggling of diesel northwards across the Border. With the decline in value of the euro against Sterling, straightforward smuggling is netting the south Armagh gangs profits similar to that being made on the adulterated petrol.

The Sunday Independent last week witnessed fuel tankers being filled in south Armagh and one driving - illegally - across the Border. The area where the main fuel smuggling operations are contained is known locally as "Shatt al-Arab" after the main oil terminal in the Persian Gulf, due to the number of fuel operations there.

The latest slew of damaged car engines is in Mayo, where gardai say they have passed 86 complaints on to the Customs Service for analysis.

Despite the massive costs involved in damage to car engines and the loss of revenue to the State, no prosecutions have taken place so far, though gardai and customs are aware of most of the outlets where the adulterated petrol is being sold.

Mayo Fine Gael TD Michelle Mulherin has called on Justice Minister Francis Fitzgerald to take action against the gangs responsible for causing such huge costs to car owners, who are finding that their insurance does not cover damage caused by the adulterated petrol.

Last month, Ms Mulherin accused Sinn Fein of avoiding a public meeting in Swinford, Co Mayo, attended by 400 people angered by the damage being caused by the adulterated petrol.

Speaking in the Dail later, Ms Mulherin said: "It begs the question whether Sinn Fein condones the practice. I ask if it could be intrinsically associated with the fact that the IRA has been oft associated with fuel laundering. We know of the very close ties of Sinn Fein with the IRA. I wondered with great interest on the night [of the public meeting]whether it is condoning what is going on."

Sinn Fein denied Ms Mulherin's accusation and accused her of "blatant electioneering". It also pointed out that one of its local representatives did attend the Swinford meeting.

Customs sources have told the Sunday Independent that over the past decade the south Armagh fuel gangs have bought well over 100 filling stations around the country, and they suspect many of these are now being used to sell the adulterated petrol.

The damage caused by the adulterants happens when the gum forms into a harder crust inside the engine, causing the engine to fail. Industry sources said it takes a full day's labour to disassemble one of the modern engines, another full day to clean it by hand and another day at least to put it back together again.

Mechanics are telling car owners it would be cheaper and more efficient to simply dump the engine and buy a second-hand engine from a damaged car as a replacement.

Sunday Independent