ISLAMABAD: Pakistan is bearing a whopping Rs240 billion loss in revenue annually due to the smuggling of petroleum products, it was revealed on Wednesday.
According to the Petroleum Commission report which was made public on Tuesday after the approval of the federal cabinet, during the year 2019-20, the tax department seized 27.9 million litres of petrol and 997 million litres of smuggled diesel.
The report states that the net loss of revenue on the seized product is around Rs48bn in 2019-20 as the government was collecting Rs36.27 and Rs47.22 taxes per litre on the motor spirit (MS) and high-speed diesel (HSD) respectively.
Petroleum products, MS and HSD, are being smuggled into Pakistan from the western border of Taftan/Iran.
However, the Commission is of the considered opinion that the seized quantity is only 20 per cent of the actual smuggled amount. “There is an unusual rise in MS and HSD consumption in the month of June 2020 as statistics show that the MS, as well as HSD sales surged to 117,005 and 289,099 metric ton in June 2020 comparable to June 2019,” said the report.
“Besides this, the commission revealed that 486 filling stations were identified across Pakistan which was purchasing MS as high as 600,000 litres on a monthly basis,” the report noted.
Similarly, the report also highlighted the Oil Marketing Companies (OMCs) and petrol pump owners’ role in mixing chemicals into the fuel which was considered criminal negligence. In addition, the report also highlighted the mixing of manganese and Naphtha in petrol.
When the Oil and Gas Regulatory Authority (OGRA), on the complaint of Atlas Honda, took samples from PSO, Shell and Total fueling stations, it emerged that 54mg against the standard 24mg of manganese was being added to each kilogram of cheap fuel to enhance its quality.
The Commission in its recommendations pertaining to smuggling as well as adulteration stated that the government must sensitize the Frontier Corps (South) to take strict measures at the Pakistan-Iran border to curb such colossal evasion of taxes.
“Likewise, the smuggling through sea route goes on as only in the month of July 2020, two huge shipments of Iranian contraband oil were apprehended on the information of international agencies,” it read.
“In this regard, Pakistan Coast Guards assisted by Pakistan Customs have to play their effective role and they may be directed as such,” the Commission recommended. Moreover, the commission further said that the government must set up additional quality control laboratories across the country.
“There is also a dire need for mobile testing units,” the report noted, adding that In coordination with the district administration, such units should routinely check the quality of petroleum products in retail outlets and depots in their area of jurisdiction to curb this menace.
