In a landmark effort to curb smuggling, theft, and adulteration in the petroleum sector, the government is set to launch a real-time digital tracking system for petroleum products within a month.
The initiative, backed by the recently passed Petroleum (Amendment) Act 2025, will monitor every litre of fuel—from import and production to storage, transport, and retail—aiming to recover annual revenue losses estimated at Rs. 300–500 billion. The National Assembly passed the amendment on Wednesday, empowering authorities to deploy IT-based systems for continuous oversight of petroleum products and strengthening enforcement through inter-agency coordination.
The amendment modernizes the nearly century-old Petroleum Act 1934, introducing digital tracking provisions and granting enforcement powers to deputy commissioners, assistant commissioners, and designated officers under the Customs Act 1969. These officials can now seize smuggled or illegally stored fuel and related infrastructure, both before and after convictions.
The Oil and Gas Regulatory Authority (OGRA), in coordination with market stakeholders, has been preparing the technical framework to ensure smooth implementation. The tracking system will cover petrol stations, transportation routes, and designated storage facilities, providing complete visibility across the petroleum supply chain.
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The reform addresses long-standing concerns over rampant smuggling and its economic impact. Local refineries and oil marketing companies have repeatedly called for stricter controls, citing significant losses to business and government revenue. A 2020 inquiry commissioned by then-Prime Minister Imran Khan estimated annual oil smuggling from Iran at over Rs. 250 billion, highlighting the sector’s lack of oversight. More recent intelligence from April 2024 revealed that 10 million litres of Iranian petrol and diesel are smuggled into Pakistan daily, causing revenue losses exceeding Rs. 227 billion. The report also identified 533 illegal petrol stations, 105 known smugglers, and complicit personnel from more than a dozen law enforcement agencies, detailing informal border crossings and established smuggling routes nationwide.
The amended law introduces strict penalties to deter illegal activity. Individuals involved in unlawful import, transport, storage, sale, refining, or blending of petroleum products face fines of Rs. 1 million, with repeat offenders liable for Rs. 5 million. Unlicensed facilities will be closed, and their machinery, storage tanks, and petroleum products confiscated, while owners will face fines of Rs. 10 million.