The government declared an all-out war on “fake” gasoline on Friday, significantly increasing fines for people selling unauthorized products and giving investigative jurisdiction to government officials.
The crackdown starts with changing the commonly used name for such fuel, mostly chemical mixtures, from alternative fuel to fake, according to the Ministry of Knowledge Economy.
The new measures also include a “one-strike out” system, under which any vendor convicted of selling fake gasoline even once will have their license revoked, the ministry said.
Fake or alternative gasoline has been outlawed since at least 2006, largely because it was not subject to a special government tax imposed on fuel, but the government said the fake gasoline also threatens users’ safety as it can be highly unstable compared to authentic fuel products.
“The government urgently needed to set up fundamental solutions for the fake gasoline issue as it was not only creating an issue of tax evasion but also seriously threatening the safety of people,” the ministry said in a press release, citing explosions at two gas stations selling fake fuel in September and the explosion of a tank of fake gasoline earlier this month, which together claimed four lives.
Currently, government taxes make up nearly half, or 746 won ($0.64), of the cost of every liter of gasoline and 518 won of every liter of diesel, even before value-added tax. Fake fuels are priced about 500 won lower than authentic products as they are not subject to government tax.
To discourage people from selling fake products, the government will double the maximum fine for people caught selling fake fuel from the current 50 million won to 100 million won.
In addition, the government will move to give its officials investigation rights and 100-million-won ground penetrating radars to actively look for hidden underground tanks containing fake gasoline at gas stations.
In just four months from March of this year, more than 343 million liters of fake fuel were seized and 1,364 people or businesses charged.
The number of hidden underground tanks found at gas stations increased from 21 in 2009 to 77 thus far this year, suggesting that more people are taking their counterfeit products to where government officials, mostly from the Korea Institute of Petroleum Management, are unable to look because of their lack of jurisdiction, the ministry said.
Currently, gas stations caught selling fake fuel out of a hidden tank are given three chances before they are permanently put out of business. Under the new one-strike out system to be introduced, their business licenses will be revoked at the first time they are caught.