Pakistan will roll out a real-time digital tracking system for all petroleum products within the next month, in a landmark reform aimed at dismantling fuel smuggling networks, preventing adulteration and plugging revenue leakages worth Rs300–500 billion annually.

New Law Empowers Digital Crackdown

The initiative is backed by the Petroleum (Amendment) Act 2025, recently passed by the National Assembly which replaces provisions in the nearly century-old Petroleum Act 1934.

Under the new law, every litre of petrol, diesel and other petroleum products will be monitored from import and production through storage, transportation and retail sale. Authorities including deputy commissioners, assistant commissioners and customs officers are now empowered to seize smuggled or illegally stored fuel even before a court conviction.

Tracking of Petroleum Products

Technical Rollout and Coverage

The Oil and Gas Regulatory Authority (Ogra) has been working with oil marketing companies and refineries to finalize the technical framework. The system will provide continuous monitoring at:

  • Petrol pumps
  • Transport routes
  • Approved storage depots

By closing loopholes in the supply chain, officials expect the reform to disrupt illegal cross-border fuel flows, particularly from Iran and curb losses from theft and adulteration.

Scale of Black Market Problem

A 2020 inquiry under then-Prime Minister Imran Khan revealed oil smuggling worth over Rs250bn annually from Iran. An April 2024 intelligence report found:

  • 10 million litres of Iranian petrol and diesel smuggled into Pakistan daily
  • Over Rs227bn in lost revenue each year
  • 533 illegal petrol stations operating across the country
  • 105 identified oil smugglers with some law enforcement personnel implicated
Irani petrol

Harsh Penalties for Violators

The amended law introduces strict fines and enforcement measures:

  • Illegal fuel trade: Rs1m fine (Rs5m for repeat offenders)
  • Operating without a licence: Closure, confiscation of fuel/equipment, Rs10m fine
  • Expired licences: Six-month grace period to renew or face closure and Rs1m fine
  • Selling smuggled fuel: Immediate closure, licence cancellation, confiscation, Rs100m fine
  • Vehicles used for smuggling: Seized under Customs Act 1969, with proceedings starting before conviction

Enforcement and Legal Process

  • Sessions Courts will try accused individuals
  • Deputy and assistant commissioners will handle administrative enforcement
  • Appeals can be made to the High Court within 30 days of a decision

Officials say the reform is designed not only to safeguard government revenue but also to protect vehicle engines and the environment from the harmful effects of low-quality, adulterated fuel.