Around 3400 litres of kerosene stocked in 17 containers were seized from the possession of Anil Sahu yesterday, Inspector In-charge of Bhanajanagar police station, Anil Sahu, said.
Acting on a tip-off, the police raided his rented house in the village and seized the petroleum product, he said.
It is suspected that the accused might be mixing kerosene with diesel and petrol.
The accused had earlier been arrested on September 9, 2014 for allegedly illegally possessing huge quantity of diesel. He was released from jail on bail recently.