The oil industry in Pakistan is sounding an alarm over the escalating issue of petroleum smuggling, which is causing significant disruptions and financial losses across the oil supply chain. Major stakeholders in the petroleum market, including the Oil Companies Advisory Council (OCAC), Oil Marketing Companies of Pakistan (OMAP), and Pak-Arab Pipeline Company Ltd (Papco), have raised urgent concerns with the government, highlighting the urgent need for intervention to combat this crisis.
According to Adil Khattak, chairman of OCAC representing local refineries and major marketing companies, the rampant smuggling of petroleum products into Pakistan is not only threatening the survival of the oil industry but also resulting in an estimated annual revenue loss of over Rs120 billion for the government. Khattak emphasized that the influx of approximately 4,000 tonnes of smuggled fuel daily, as confirmed by the Oil and Gas Regulatory Authority (Ogra), translates to a staggering monthly loss of about $35.6 million.
The situation has reached a critical point, with Khattak describing it as a “national crisis” that demands immediate and aggressive action. He highlighted that the sales of petrol and high-speed diesel (HSD) have seen a sharp decline, reminiscent of figures observed during the challenging period of the pandemic in 2019-20. The ongoing decline in sales, particularly in March, is alarming, indicating disruptions in the supply chain and constrained sales volumes.
Tariq Wazir Ali, chairman of OMAP, echoed these concerns, emphasizing that the smuggling of Iranian petroleum products into Pakistan is causing severe damage to the economy and unfairly impacting legal businesses that comply with tax and duty obligations. He called for swift and decisive measures to eliminate smuggling and uphold the rule of law to protect the interests of legitimate businesses contributing to Pakistan’s economic development.
Amidst these challenges, Papco’s Chief Amr Ahmed highlighted the struggle to achieve optimal throughput, calling on the government to take concrete steps to ensure sufficient input into the White Oil Pipeline (WOP) to maintain operational efficiency and meet industry demands.
The oil industry’s plea for urgent government intervention underscores the gravity of the situation, emphasizing the need for collaborative efforts to combat petroleum smuggling and safeguard the stability of the oil supply chain and government revenue streams.
Story by Khaleeq Kiani
