KARACHI: In a joint operation led by the Karachi Police and Customs Intelligence agencies, a hidden warehouse in Karachi’s Korangi district has been exposed as a hub for producing counterfeit petrol and diesel. The raid, conducted in Sector 50-C, unveiled a shocking network of illegal fuel production that had been operating under the radar.

During the operation, investigators discovered a clandestine manufacturing facility where fake petrol, diesel, and hydrocarbon solvent were being produced. The raid team seized an astonishing 561,000 liters of counterfeit petrol and diesel stored in 24 oil tanks. The warehouse owner had failed to renew the necessary license for the past four years, raising serious concerns about regulatory oversight.

The illicit fuel production relied on the use of Light Aliphatic Hydro Carbon Solvent, a chemical compound primarily used in manufacturing paints and dyes. Shockingly, this solvent was being employed to inflate the quantity of the counterfeit fuel. Authorities suspect that up to 70% of the fuel in Karachi may be mixed with this fraudulent solvent, posing risks to consumers, vehicles, and the environment.

Customs officials, acting on intelligence, stormed the facility, revealing rows of oil tanks filled with the fraudulent product. The seized fuel will undergo thorough testing to determine its composition and potential hazards. The scale of this operation underscores the prevalence of fake fuel in the market and its adverse impact on air quality and machinery.

Authorities are now conducting a comprehensive investigation into the entire supply chain, from production to distribution. The goal is to dismantle this criminal network and hold those responsible accountable. The urgency of the situation demands swift action to prevent further harm.

In a related matter, the Collector Customs Quetta Tasleem Akhtar raised concerns about the pending Valuation Ruling for Light Aliphatic Hydro Carbon Solvent of Iran origin imported via land routes. Earlier, in 2023 collector Quetta Agha Saeed Ahmed also recommended to Customs Valuation to determine the value of this product.

Currently assessed at US$ 350 per metric ton (PMT), recent data reveals that similar goods of UAE origin cleared from Karachi Port commanded a significantly higher rate of US$ 670 per PMT. Importers have objected to applying the UAE evidential value to their consignments, citing differences between land and sea ports.

While the Collectorate assesses goods based on evidential data to avoid legal challenges, a comprehensive evaluation is necessary. Section 25A of the Customs Act, 1969 mandates considering various factors, including origin, import route, freight costs, and quality specifications. The Directorate of Customs Valuation in Karachi has initiated the process of determining the value under Section 25A for this item. Despite two meetings convened on November 8, 2023, and February 1, 2024, the issuance of the valuation ruling remains pending.

In light of these developments, the Directorate of Customs Valuation, Karachi, is urged to expedite the ascertainment of the Customs Value for this item and promptly issue the Valuation Ruling to resolve the matter without further delay. The government exchequer and public safety depend on swift action to curb the illegal fuel trade.

Moreover, The Explosives Department, Provincial Government and District Administration needs to keep an eye on the import and misused of this hydro carbon solvent.