Two petrol stations have been raided and seven men and two women from across southern England have been arrested for their involvement in a suspected £3m fuel fraud, during an operation by HM Revenue and Customs (HMRC).

About 170 HMRC officers, assisted by the Vehicle and Operator Services Agency (VOSA) and Sussex and Hampshire Police, searched 12 residential premises, five business premises and two petrol stations in East and West Sussex, Kent, Essex, Somerset and Hampshire on 23 July.

The investigation is focused on the suspected illegal purchase and sale of rebated kerosene and biofuel to motorists as duty-paid road diesel. It is believed the fraud is worth an estimated £3m in unpaid excise duty and VAT.

All those arrested were questioned by HMRC investigators and released on bail while enquiries continue.