New Law Targets Petroleum Smuggling in Pakistan

Islamabad, August 30, 2025, 09:35 PM PKT — President Asif Ali Zardari has signed the Petroleum (Amendment) Bill, 2025, into law, unleashing a powerful crackdown on petroleum smuggling, illegal filling stations, and tax evasion, while rolling out IT-based tracking across the fuel supply chain, as per official reports. Passed by Parliament this month, the law bolsters enforcement powers for Deputy Commissioners, Assistant Commissioners, and Customs authorities, enabling sealing of illegal pumps, confiscation of smuggled fuel, and seizure of illicit trade vehicles, with steep fines, asset confiscation, and criminal prosecution for repeat offenders.

Petroleum smuggling, rampant in Balochistan and Sindh via the Iranian border, accounts for up to 20% of the market, undermining licensed retailers, slashing tax revenue, and flooding consumers with substandard fuel, with the Oil Companies Advisory Council (OCAC) flagging smuggled high-speed diesel (HSD) at Rs180/liter (versus Rs258.64) and adulterated motor spirit (MS) at Rs160/liter (versus Rs255.63), causing Rs1.5 billion daily losses and a 6% drop in legal sales in February 2025. The Petroleum Division added six new enforcement clauses, targeting large-scale operations (e.g., tankers over 40,000 liters), addressing past regulatory gaps that let unregistered pumps evade raids.

The IT-based tracking system, piloted in select districts and now nationwide, will trace shipments from refineries to outlets, integrating with customs checkpoints and refinery records for transparency, starting in urban centers before border and rural areas, amid government pressure to boost non-tax revenues (e.g., Rs1.3 trillion petroleum levy for FY2025–26). Success hinges on implementation, political will, and resisting smuggling networks. Web context on energy reforms shows past failures, while posts found on X reflect hope mixed with doubt—some cheer action, others question enforcement. Critically, the narrative of “revenue protection” may mask implementation risks—web data hints at past resistance, and X sentiment suggests distrust in effective execution, pointing to potential hurdles.