The scheme involved parking tankers on the side of a dead-end road near a residential area where the transfer of diesel was carried out.

The ministry’s state director S Jegan said the raid was carried out by a team of enforcement officers at 5am following six months of surveillance after suspecting fraudulent activities by the syndicate in the area, Bernama reported.

He said it was a new modus operandi in Penang as the syndicate was willing to take a huge risk by parking a tanker with a capacity of 24,000 litres in an open area.

“Investigations found that this tanker lorry had been left here for about a month, while another lorry that acted as a ‘mobile warehouse’ would come carrying a load of diesel for the purpose of transfer.

“After being fully filled, this tanker lorry would make a delivery to a certain location,” he told reporters at a press conference at the location today.

Jegan said although the area was quite busy, the illegal activity went unnoticed because the syndicate chose early morning hours to operate to avoid being detected by the authorities.

He added that three men were spotted near the tanker when the raid was carried out this morning.

“A 29-year-old local was arrested, while two other individuals believed to be foreigners fled to a nearby bush area,” he said.

According to Jegan, the enforcement team found about 14,000 litres of diesel in the tanker lorry, in addition to six intermediate bulk container (IBC) tanks found in another lorry.

He said the ministry also raided an unnumbered warehouse in the Simpang Ampat area which is believed to be the diesel storage location before being transferred to the tanker lorry.

In total, Jegan said the team seized a 14-tonne canvas lorry, a 24,000-litre tanker lorry, 12 units of IBC tanks, three pump motors, three rubber hoses and a mobile phone with the total value of the seizure estimated at RM200,000.

Further investigations are still under way and the case is being investigated under the Control of Supplies Act 1961.