In a major step against smuggling, theft, and adulteration, the government will launch a real-time digital tracking system for petroleum products within a month. The system, under the Petroleum (Amendment) Act 2025, will monitor every litre from import to final sale, aiming to prevent annual revenue losses of Rs300-500 billion.
Highlights of the Petroleum (Amendment) Act 2025
The National Assembly passed the amendment on Wednesday, empowering authorities to use IT-based monitoring. The law strengthens enforcement by coordinating agencies regulating storage, transportation, and sales.
This act replaces key provisions of the Petroleum Act 1934, adding modern tracking measures. It grants enforcement powers to deputy commissioners, assistant commissioners, and officers under the Customs Act 1969. These officials can seize smuggled or illegally stored fuel and related infrastructure, even before conviction.
The Oil and Gas Regulatory Authority (OGRA) is working with market stakeholders to finalize technical aspects for a smooth launch. The system will cover petrol stations, transportation routes, and storage facilities, ensuring complete visibility across the supply chain.
Smuggling Losses and Intelligence Reports
Rampant smuggling has caused heavy economic losses. Local refineries and oil marketing companies have demanded stricter controls for years.
A 2020 inquiry by former PM Imran Khan revealed oil smuggling worth over Rs250 billion annually from Iran. In April 2024, an intelligence report estimated 10 million liters of Iranian fuel entered Pakistan daily, causing Rs227 billion in losses.
The report identified 533 illegal petrol stations, 105 known smugglers, and complicit personnel from several law enforcement agencies. It also exposed informal border crossings and established smuggling routes nationwide.
Strict Penalties Under the New Law
The law introduces severe fines for illegal import, storage, sale, refining, or blending of petroleum products. First-time offenders will face Rs1 million fines, with repeat offenders fined Rs5 million.
Unlicensed facilities will be shut down, and their machinery, tanks, and fuel confiscated. Owners face Rs 10 million penalties.
Facilities with expired or cancelled licenses have six months to renew or restore them. Failure will result in sealing, asset confiscation, and a Rs1 million fine. The Department of Explosives must process license renewals within 30 days of receiving complete applications.
Premises selling smuggled fuel will be closed immediately. Their assets will be confiscated, and owners fined Rs100 million. The Department of Explosives must cancel its operating license.
Vehicles used for smuggling will be confiscated under the Customs Act 1969. Seized goods will go to customs for further action. Proceedings can begin before conviction.
Legal Process and Appeals
Trial powers rest with the Sessions Court, while administrative powers go to deputy and assistant commissioners. Appeals can be filed in the High Court within 30 days.
Industry experts believe the move could mark a turning point in Pakistan’s fight against petroleum-related crimes. By using technology for end-to-end monitoring, the government aims to cut smuggling networks, protect legal businesses, and recover billions in lost revenue. If implemented effectively, the initiative could improve fuel quality for consumers and strengthen investor confidence in the energy sector.