Pakistan is preparing to launch a nationwide digital tracking system for petroleum products within the next month, a move officials say could help plug revenue leaks worth hundreds of billions of rupees each year.
The initiative follows the National Assembly’s approval of the Petroleum (Amendment) Act 2025, which grants authorities new powers to combat fuel smuggling, theft, and adulteration.
Tracking Every Drop
The new system will monitor the journey of fuel from import terminals and refineries to storage depots, tankers, and retail pumps. Developed jointly with the Oil and Gas Regulatory Authority (OGRA) and industry players, it will use real-time data to detect irregularities along the supply chain.
Officials estimate that Pakistan loses between Rs300 billion and Rs500 billion annually to petroleum-related smuggling and illegal trade. A significant share of this—valued at over Rs250 billion a year—comes from petrol and diesel reportedly entering the country from Iran via informal border crossings. Some reports suggest as much as 10 million litres per day is slipping through unchecked.
Stiff Penalties and Expanded Powers
Under the amended law, local administrations and designated customs officers can now seize smuggled or illegally stored fuel even before a conviction. Penalties have been sharply increased:
- Individuals caught illegally importing, transporting, or selling petroleum products face fines starting at Rs1 million, rising to Rs5 million for repeat offences.
- Unlicensed facilities risk closure, confiscation of assets, and fines up to Rs10 million.
- Expired licence holders have six months to renew before facing shutdown and fines.
- Premises found selling smuggled fuel could be sealed immediately, with owners fined Rs100 million. Vehicles used in smuggling will also be forfeited.
Trials will take place in Sessions Courts, while deputy and assistant commissioners will have administrative authority. Convicted parties may appeal to the High Court within 30 days.
Industry Push and Expected Impact
Refineries and oil marketing companies have long pressed for tighter enforcement, warning that smuggling undercuts legitimate businesses and slashes government tax revenue. Beyond the fiscal hit, officials say the reform will help reduce fuel adulteration—a problem that not only damages vehicle engines but also increases harmful emissions.
If implemented effectively, the digital tracking system could become one of the most significant overhauls of Pakistan’s fuel supply chain in decades, targeting a shadow economy that has thrived for years.
