BeNewz
Related Articles
–Challenges Customs’ Authority to Act — as wider bonded-fuel fraud crackdown widens across Pakistan
Aftab Maken
ISLAMABAD: Pak-Arab Refinery Limited (PARCO) remains locked in a standoff with Pakistan Customs weeks after being accused of releasing nearly 24 million litres of petrol from its Faisalabad bonded warehouse without proper clearance — and rather than answering the allegations, the state-backed refinery has instead challenged whether the local Collectorate even has the authority to pursue the case.
The original notice
The Collectorate of Customs (Appraisement), Faisalabad, issued a show-cause notice (C. No. 04/BWH/PUB/2008/4577) accusing PARCO of delivering roughly 23.81 million litres of Motor Spirit to Gas & Oil Pakistan Limited (GO Petroleum) between January 1 and June 24, 2026, without verifying Ex-Bond Goods Declarations (GDs) through the WeBOC system, as required for goods leaving its public bonded warehouse on Jhumra Road, Gatti, Faisalabad, operated under Licence No. 04/BWH/PUB/2000.
Customs alleged the conduct violated Section 97 (removal of warehoused goods without clearance), Section 99 (unauthorised transfer of goods) and Section 116 read with Rule 468 of the Customs Rules, 2001, and said the lapses delayed the deposit of duties and taxes and, in some instances, led to incorrect collection of the Petroleum Development Levy. PARCO was directed to appear before Collector Dr Rizwan Basharat on July 3, 2026, and show cause why its licence should not be cancelled under Rule 344 of the Customs Rules, with the notice warning the case would be decided on available evidence if no representative appeared.
PARCO sidesteps the hearing, questions jurisdiction
Rather than filing the requested reply by the July 3 deadline, PARCO instead approached the federal Petroleum Division, asking it to weigh in on whether the Faisalabad Collectorate has the legal jurisdiction to initiate proceedings against the company at all. Reporting since then indicates PARCO has still not issued any public response to the substance of the allegations, and the matter remains stalled pending resolution of the jurisdictional question it raised. The refinery did not respond to media queries put to its managing director.
FBR tightens oversight across all bonded fuel terminals
The case has prompted a broader regulatory response. The Federal Board of Revenue has ordered stricter, round-the-clock monitoring of public and private bonded petroleum, oil and lubricants (POL) warehouses in Punjab, including Faisalabad and Mehmood Kot, and deployed additional customs officials to oversee the Machike Terminal and other bonded storage sites. Under the new standing order, issued under Section 97 of the Customs Act read with Rule 468 of the Customs Rules, operators must ensure no bonded POL product is removed or transferred without verified Ex-Bond GDs and full payment of duties, with officials now also tracking daily stock records and tank-dip measurements.
A wider crackdown on bonded-fuel fraud
The PARCO notice has emerged alongside a larger enforcement push against alleged fraud in Pakistan’s bonded fuel supply chain. The Federal Investigation Agency has booked senior executives of GO Petroleum — the same buyer named in the PARCO notice — along with officials of a Port Qasim bonded terminal operator and several customs officials, accusing them of removing and selling thousands of tonnes of imported, duty-unpaid fuel using forged documentation before any Goods Declaration was filed. GO Petroleum has said it is current on its payments and is cooperating with the inquiry. A separate case has also booked another operator, Flow Petroleum, in an alleged Rs 1.26 billion tax-evasion scheme, with investigators also flagging possible negligence by the Pak-Arab Pipeline Company (PAPCO) in verifying transport documentation for imported fuel.
With PARCO’s jurisdictional challenge still pending before the Petroleum Division, no final decision has been made on the licence-cancellation question, and the allegations against the company remain unproven at this stage. The outcome is likely to be watched closely given PARCO’s central role in Pakistan’s fuel storage and pipeline network, and the wider revenue-leakage concerns now driving Customs’ tightened oversight of bonded warehouses nationwide.
