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. Last Updated: 07/27/2016

Cops Say Up to 25% of All Fuel Sales Are Illegal

Illegal sales of gasoline and other oil products account for between 20 percent and 25 percent of all fuel sales in Russia, the Interior Ministry said Tuesday.

The costs of illegal oil industry operations such as pipeline thefts, tax evasion and unlicensed gasoline production, rose by as much as 8 percent to 22 billion rubles ($787 million) in 2004, Timofei Kurayev, an officer from the Interior Ministry's department for fighting economic crimes, told reporters.

"We are talking about billions of rubles the state is losing annually from evasion of excise payments by just one company," Kurayev said. He declined to name any companies involved in illegal gasoline production or tax evasion, before the courts rule on their cases.

Russian companies boosted oil production for the sixth straight year last year as Europe, Asia and the United States tried to reduce dependence on supplies from the Middle East.

The Interior Ministry has proposed the government amend the tax law by cutting the term for making excise payments on oil products production to between 10 and 15 days from the current two months, to make it more difficult for companies to avoid the payments, Kurayev said.

The government recovered 6.7 billion rubles of the money lost last year from illegal action in the oil industry, said Nikolai Malinov, another officer at the ministry's department on economic crimes. Thefts of oil from pipelines fell by 24 percent in 2004 from the previous year, according to Kurayev.

The ministry will seek more funds from the government for quicker analyses and inspections of oil products, Kurayev said. The ministry will also propose strict procedures in granting licenses for making oil products, giving quality certificates for gasoline products, and closer inspection of gasoline stations and oil product factories, the economic security department said.