Pakistan will implement real-time digital tracking of petroleum products within a month, marking a major technological step to curb smuggling, theft, misappropriation, and adulteration in the fuel supply chain. The initiative follows the National Assembly’s approval of the Petroleum (Amendment) Act 2025, enabling authorities to monitor each litre of fuel from import or production to storage, transport, and final sale. Officials estimate that such illicit activities currently cause annual revenue losses of Rs300-500 billion. The legislation empowers multiple enforcement bodies to use information technology-based systems for continuous monitoring and coordinated action across the petroleum sector.
The updated law amends the Petroleum Act 1934, introducing digital tracking provisions and granting enforcement powers to deputy commissioners, assistant commissioners, and officers under the Customs Act 1969. These officials can seize smuggled or illegally stored fuel, storage facilities, and related infrastructure both before and after conviction. Ogra has been collaborating with industry stakeholders to address technical and operational requirements for nationwide rollout, ensuring the system covers petrol stations, transportation routes, and storage depots. Local refineries and oil marketing companies have long advocated for stronger controls to address border smuggling and internal distribution malpractice, warning of severe commercial and fiscal damage caused by illegal fuel trade.
The issue has persisted for years, with a 2020 inquiry revealing oil smuggling worth over Rs250 billion annually from Iran and highlighting systemic regulatory gaps. A subsequent intelligence report in April 2024 identified daily smuggling of around 10 million litres of Iranian petrol and diesel into Pakistan, resulting in revenue losses exceeding Rs227 billion. It also named 533 illegal petrol stations, 105 known oil smugglers, and documented involvement of personnel from more than a dozen enforcement agencies. These findings detailed the use of informal border crossings and established smuggling routes.
The Petroleum (Amendment) Act 2025 enforces strict penalties for violations. Individuals involved in the illegal import, transport, storage, sale, refining, or blending of petroleum products will face fines starting from Rs1 million, with repeat offenders liable for Rs5 million. Facilities operating without valid licences will be shut down, with confiscation of machinery, tanks, and petroleum products, and owners fined Rs10 million. Operators with expired or cancelled licences have six months to comply, failing which assets will be seized, and fines imposed. Storage or sale of smuggled fuel will result in immediate closure, confiscation of assets, and fines of up to Rs100 million, with licences cancelled by the Department of Explosives. Vehicles used in smuggling will be confiscated under the Customs Act 1969, with proceedings allowed before conviction. Cases will be tried in the Sessions Court, with appeals permissible in the High Court within 30 days. The measure aims to bring order to Pakistan’s petroleum supply chain, protect the environment, and recover substantial public revenue losses.
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