The Federal Board of Revenue (FBR) has initiated a fact-finding inquiry to investigate the alleged involvement of customs officials in the smuggling of solvent oil from Iran/Taftan to Punjab. The FBR notes that a network is reportedly engaged in this activity.
This investigation is unnecessary and waste of energy, as the solvent oil in question is not prohibited or banned under any order. Ministry of Commerce has confirmed that the item is not covered under Import Policy Order.
The Pakistan Single Window (PSW) system automatically clears this product without requiring any documents or licenses. All consignments were cleared through customs by filing Goods Declarations (GD), indicating that this is not smuggling.
Recently, a tanker carrying Light Aliphatic Hydrocarbon solvent was intercepted by Customs Intelligence but had to be released because the item is not banned under the Import Policy Order (IPO).
Collector Quetta, Yaseen Murtaza, known for his honesty and competence, conducted extensive research on the issue. He questioned importers about the solvent’s destination and usage, interrogated drivers of the carrying vehicles, and approached oil marketing companies to determine if they were purchasing the commodity. It was discovered that the solvent was being mixed with fuel to increase its quantity. This practice has reportedly reduced the smuggling of Iranian fuel but has also been damaging vehicles.
The issue could be resolved if the Ministry of Commerce amended the import policy to either ban the solvent or require licenses. This would enable the PSW to demand the necessary documents, making a fact-finding mission against customs staff logical if the solvent oil was still cleared.
In the meantime, the Ministry of Energy (Petroleum Division) has advised the Deputy Director of the Regional Office in Quetta to impose a penalty of Rs 300,000 on each tanker of “Light Aliphatic Hydrocarbon Solvent,” “White Spirit,” and “Xylene.”
This applies to all 874 tankers. Importers must provide an undertaking on judicial stamp paper that the products will be supplied to industries for industrial use. Customs Intelligence and district authorities will confirm the receipt of these petroleum products in the respective industries. Importers are also required to obtain licenses in Form “L” or “M” of the Petroleum Rules, 1937, for future imports, or face confiscation of their products.
The tankers will be released upon receipt of the Treasury Challan for the penalty payment.