Louth County Council has spent over €800,000 on sending toxic residue produced by the laundering of diesel by criminals abroad for proper disposal.
The Department of the Environment and Local Government says it has provided €823,930 to the council in the last two years by way of "exceptional funding" to deal with the problem.
The waste management legislation holds the local authority responsible for the proper disposal of the residue, which resembles black tar and is highly toxic. The authorities affected by this problem are primarily those on the Border.
The laundering of gas oil or agricultural diesel involves using acids and other chemicals to remove the identifying marker from it, allowing it to be sold illegally as auto diesel. It has long been a source of income for criminals.
Large profits are made because of the huge difference between the taxes due on the two products. Along the Border, the additional difference in the exchange rate with sterling continues to benefit forecourts in the Republic which have now an established customer base in Northern Ireland.
For example, marked gas oil can be bought for 45 cent per litre, but after laundering it can be sold as auto diesel and retail at around €1.03 a litre. The difference in price is the approximate profit for the launderer. Every litre of laundered oil costs the Exchequer around 56 cent in unpaid excise duties and taxes.
The detection of oil laundries and the investigation of those behind them is carried out by the Revenue. Up to the end of October this year it made 120 detections of laundered oil, including 20 retail outlets and 68 hauliers. A total of 286,904 litres of laundered oil was seized. A number of prosecutions are planned.
Two oil laundries were detected in Co Monaghan this year compared to four in 2004. This does not include oil laundries detected north of the Border.
However, one Revenue source said motorists cannot presume that the garage with the cheapest diesel is the one using laundered diesel because "price wars and competition between outlets are features of the oil industry. In addition, it is often the case that those dealing in laundered oil charge the full retail price in order to maximise their profits."