Adding to the state’s revenue problems concerning illicit fuel trade, currently rampant, as the government has admitted while seeking to implement new regulations and clamp down, another related front, auto LNG smuggling, seems to be on the rise.
Sector officials contend the increasing popularity of LNG use by drivers, which has gained momentum in recent years, is prompting greater incentives for tax evasion in this domain.
LNG intended to fuel industrial facilities, which is taxed at a lower rate than LNG for vehicles, is being sold in the auto fuel market by traders who are exploiting certain loopholes and a lack of state monitoring to pocket the difference in special consumption tax (EFK) amounts.
Uneven taxes imposed on auto and heating fuel has also been the cause of similar practices in the auto fuel market.
Market officials are urging for protective measures to prevent the LNG smuggling problem from growing in proportion. A first step would entail requiring LNG suppliers and retailers to install an “inflow-outflow” data system that would enable the Finance Ministry to track purchases and sales in the sector.