Gov’t considering mandatory audits on petrol stations within 50 km of borders to combat fuel smuggling

As part of a strategic policy shift by the ministry of domestic trade and cost of living (KPDN) to disrupt the supply lines of cross-border fuel smuggling syndicates, the government is considering mandatory audits on all fuel retailers located within a 50 km radius of the national border.

Deputy KPDN minister Datuk Dr Fuziah Salleh told The Star that the government is currently reviewing existing policies to further restrict fuel purchases in high-risk zones, acknowledging that current limits have not completely stopped the leakages.

“While fuel purchase limits in border areas are already in place, further tightening measures are being considered. These include stricter fleet card compliance systems and rigorous audits of all petrol stations within a 50 km radius of the border,” she said.

The proposed audits are part of a broader escalation under Ops Tiris 4.0, which was implemented from March 16 to crack down on fuel leakages and smuggling. If implemented, hundreds of fuel stations across northern and southern states in Peninsular Malaysia as well as at border towns in Sabah and Sarawak will be affected.

According to KPDN’s statistics as of the fourth quarter last year, 817 petrol stations are operating across the four northern and east coast border states in the peninsula, namely Kedah (372), Kelantan (232), Terengganu (174) and Perlis (39), with most falling within the 50-km audit radius. Separately, the number of active petrol stations in Sabah is 268, while Sarawak and Johor have 280 and 648 respectively.

Fuziah warned that the ministry will continue to show zero tolerance towards any petrol station operator found colluding with syndicates. “Such actions not only violate the law but constitute a betrayal of Malaysians by misappropriating fuel subsidies worth billions of ringgit intended for eligible citizens,” she said.

The ministry will also be actively going after the syndicate masterminds by invoking the Anti-Money Laundering Act (AMLA), as it is no longer satisfied with merely seizing smuggled diesel and arresting low-level drivers.

“Our focus extends beyond fuel seizures. Efforts are now directed at dismantling syndicate networks at their core, including freezing assets and tracking financial flows under AMLA. This prevents syndicates from re-emerging under different identities,” she explained, adding that smugglers have continuously evolved their tactics, frequently using “ghost vehicles” fitted with illegally modified, oversized fuel tanks to make multiple trips to stockpile subsidised fuel before slipping across the border.

Looking to sell your car? Sell it with Carro.