Oil smuggling ring broken up by Shenzhen customs
Shenzhen customs broke up a smuggling ring alleged to smuggle 20,000 tons of red oil worth a least 100 million yuan since 2007. Customs say the ring have already evade at least 30 million worth of taxes.
Red oil, also known as marked oil is used only in Hong Kong and Macau. It is a light diesel oil colored with a red dye. Its tax exempted in Hong Kong so its cheaper, but its prohibited to be sold in the mainland. Officers arrested 27 suspects and now in custody. The group led by a suspect named Chen used fishing boats to smuggle the oil from Hong Kong to Guangdong were its decolored before being sold to small factories and restaurants in Shenzhen and Dongguan.
Oil smuggling was been rampant due to the huge price difference between the mainland and the international market. Red oil could be sold for HK$ 5,000 per ton in Hong Kong, and smugglers can profit up to 2,000 yuan per ton if they sell it to the mainland.