Refinery Fights Customs to Avoid Explaining Why It Released Fuel Without Clearance

State-owned Pak-Arab Refinery Limited (PARCO) has questioned the powers of Collectorate of Customs (Appraisement), Faisalabad in a notice accusing it of violating customs rules instead of clarifying the alleged release of 24 million litres of petrol.

Sources told ProPakistani that PARCO was required to submit its reply to the Customs Department by July 3. Instead of responding to the allegations, the refinery approached the Petroleum Division to seek its opinion on whether the Faisalabad Customs Collectorate had the jurisdiction to initiate proceedings against the company.

The show-cause notice alleges that PARCO released petroleum products from its public bonded warehouse without completing the mandatory customs clearance process required under the Customs Act, 1969.

According to the notice, PARCO holds Public Bonded Warehouse Licence No. 04/BWH/PUB/2000 for storing High-Speed Diesel and Motor Spirit at its warehouse on Jhumra Road, Faisalabad. As the warehouse licensee, the company is required to use the WeBOC system to verify Ex-Bond Goods Declarations (GDs), process bond-to-bond transfers and ensure compliance before petroleum products are released.

Customs alleged that between January 1 and June 24, 2026, PARCO delivered 23.81 million litres of Motor Spirit to Gas & Oil Pakistan Limited without verifying Ex-Bond GDs through WeBOC, as required under the Customs Act and Customs Rules.

The notice further states that the products were released before the filing of Ex-Bond GDs and payment of applicable duties and taxes. According to Customs, the alleged violations resulted in delays in the collection of duties and taxes and, in some cases, incorrect recovery of the Petroleum Development Levy (PDL).

The Collectorate has alleged that PARCO violated Sections 97, 99 and 116 of the Customs Act, 1969, read with Rule 468 of the Customs Rules, 2001. The alleged violations are punishable under Section 156 of the Customs Act.

Based on these allegations, Customs has asked PARCO to explain why its public bonded warehouse licence should not be cancelled, without prejudice to any other legal action available under the law.

PARCO has not publicly responded to the allegations. The refinery has instead raised the issue of the Collectorate’s jurisdiction, with the matter now awaiting further proceedings.