Pakistan introduces bill to digitally track petroleum products, tackle smuggling and adulteration

The government has tabled a new bill, presented by Petroleum Minister Ali Pervaiz Malik, in the National Assembly aimed at digitally tracking the journey of petroleum products from import and production to retail sale. 

According to a news report, the bill, titled the Petroleum (Amendment) Act, 2025, seeks to combat smuggling and adulteration, which result in annual revenue losses estimated between Rs300 billion to Rs500 billion, and cause environmental and vehicle engine damage.

The bill proposes amendments to the 1934 Petroleum Act. Key provisions include using information technology to track petroleum products and taking strict action against illegal activities such as smuggling, unauthorized transportation, and illegal petrol pumps.

The new amendments aim to empower authorities to confiscate petroleum products, equipment, machinery, and storage facilities. Deputy commissioners, assistant commissioners, and designated officers under the Customs Act will be authorized to take action against violators before and after conviction.

The bill specifies penalties for violations, including fines ranging from Rs1 million to Rs5 million for smuggling or illegal sale, and the confiscation of assets and machinery. Facilities operating without a valid license will face closures, with fines of up to Rs10 million. Additionally, any transportation used to carry smuggled petroleum will be confiscated.

The Department of Explosives will ensure the renewal of licenses within a month upon receiving the necessary documents and fees. Premises involved in smuggling will face severe penalties, including a Rs100 million fine and closure of the facility.

Local refineries and major oil marketing companies have long been urging the government to take more stringent measures at both the borders and domestic production and sale points to control petroleum smuggling. 

This issue has negatively impacted their businesses and caused significant revenue losses to the government.

A 2020 inquiry estimated that over Rs250 billion worth of petroleum products were being smuggled into Pakistan annually, mainly from Iran. A joint intelligence report from April 2024 revealed that nearly 10 million liters of Iranian petrol and diesel entered Pakistan daily, causing a revenue loss exceeding Rs227 billion. 

The report also identified individuals involved in illegal activities, including 533 illegal petrol stations and 105 smugglers.