HM Revenue & Customs (HMRC) has seized 2,800 litres of contaminated fuel, red diesel and kerosene from a filling station in the county of Caerphilly in South Wales.

HMRC road fuel testing officers found two large fuel tanks containing what purported to be duty-paid white diesel selling at £1.25 a litre. Checks showed the white diesel had been ‘stretched’ with large quantities of kerosene, which attracts a lower rate of duty.

The officers later seized and removed 990 litres of the contaminated fuel, 990 litres of red diesel and 820 litres of kerosene. Penalties will also be issued for fuel stretching and for failing to register as a registered dealer in controlled oils (RDCO).

As enquiries continued, a number of individuals arrived at the filling station to buy diesel. Officers seized ten commercial and private vehicles which tested positive for red diesel or contaminated fuel. These were restored after payment of a penalty plus the duty on a full tank of white diesel.

Stuart Fenton from HMRC’s South West and Wales Road Fuel Testing Unit said: “White diesel selling at 15p less than the normal price might seem like a fantastic deal, but in this case it was no bargain. Kerosene makes white diesel more combustible, and prolonged use would undoubtedly damage the engine of any vehicle.

“Legitimate businesses are already facing difficult times, and it is wrong that they should be undercut by those involved in this type of activity. Anyone with information about fuel fraud can tell us by contacting the Customs Hotline on 0800 59 5000.”

An HMRC spokeswoman said it would not identify the filling station while investigations were continuing.