Govt to Launch Real-Time Digital Tracking of Petroleum Products

In a landmark move to combat smuggling, theft, and adulteration in the petroleum sector, the government is set to roll out a real-time digital tracking system for petroleum products within a month. The initiative, backed by the recently passed Petroleum (Amendment) Act 2025, aims to monitor every litre of fuel from import and production to storage, transport, and final sale, addressing 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 monitoring of petroleum products. The legislation also strengthens enforcement by coordinating efforts across various agencies to regulate storage, transportation, and sales. The Petroleum (Amendment) Act 2025 updates the nearly century-old Petroleum Act 1934, introducing provisions for digital tracking and granting enforcement powers to deputy commissioners, assistant commissioners, and designated officers under the Customs Act 1969. These officials are now authorized to seize smuggled or illegally stored fuel and related infrastructure, both before and after conviction. The Oil and Gas Regulatory Authority (Ogra), in collaboration with market stakeholders, has been working on the technical aspects of the system to ensure a smooth rollout. The tracking system will cover petrol stations, transportation routes, and designated storage facilities, providing end-to-end visibility of the petroleum supply chain. The reform comes amid growing concerns over rampant smuggling and its impact on the economy. Local refineries and oil marketing companies have long called for stricter controls, citing significant damage to their businesses and government revenue. A 2020 inquiry commissioned by then-Prime Minister Imran Khan revealed oil smuggling worth over Rs250 billion annually from Iran, highlighting the lack of oversight in the sector. A more recent intelligence report from April 2024 estimated that 10 million litres of Iranian petrol and diesel are smuggled into Pakistan daily, resulting in a revenue loss of over Rs227 billion. The report also exposed the involvement of 533 illegal petrol stations, 105 known oil smugglers, and complicit personnel from more than a dozen law enforcement agencies. It detailed informal border crossings and established smuggling routes across the country. The amended law introduces severe penalties to deter illegal activities. Individuals involved in the illegal import, transport, storage, sale, refining, or blending of petroleum products will face fines of Rs. 1 million, with repeat offenders subject to penalties of Rs/ 5 million. Facilities operating without valid licences will be shut down, and their machinery, storage tanks, and petroleum products confiscated. Owners of such facilities will face fines of Rs. 10 million. For facilities with expired or cancelled storage licences, a six-month grace period has been granted for renewal or restoration. Failure to comply will result in the sealing of the facility, confiscation of assets, and a fine of Rs. 1 million. The Department of Explosives is required to process licence renewals within 30 days of receiving complete documentation and payment. In cases where premises are found storing or selling smuggled fuel, the law mandates immediate closure, confiscation of assets, and a fine of Rs. 100 million. The Department of Explosives must also cancel the operating licence of such facilities. Vehicles involved in smuggling activities will be confiscated under the Customs Act 1969, with seized goods handed over to customs officers for further action. Importantly, confiscation proceedings can begin before any conviction. The law vests trial powers with the Sessions Court, while administrative authority will be exercised by deputy and assistant commissioners. Aggrieved parties will have the right to appeal to the High Court within 30 days of a decision.