The smuggling of petrol and diesel has increased such that it has sent alarming signals through the oil industry in Pakistan. The Oil Companies Advisory Council took an immediate halt and indirectly sent a warning signal to OGRA and the Ministry of Petroleum. OCAC warns that if the smuggling is allowed to go on without any check, the oil refineries within the country may be permanently closed.
After the improvement brought about by the anti-smuggling drive, reports in recent times have shown a disturbing resurgence in illegal oil trafficking. It is estimated that daily consumption includes about 10 million litres of smuggled petroleum products, accounting for almost 20% of the domestic consumption of the country. Already, this illegal trade has brought about a decline in the sale of petrol and diesel by 5%.
The situation has reached a point where the smuggled oil is being sold openly in major cities, including Islamabad, Rawalpindi, and Peshawar. It inflicts a loss of almost a billion dollars per year upon the national exchequer and discourages potential foreign investment in the oil sector of Pakistan.
The letter from the OCAC expresses urgency and stern action. The organisation fears that unless the smuggling is contained, the process would undermine not only the profitability of oil companies operating within the law but would destabilize the whole sector. The economic consequences also stretch beyond this industry and could threaten national revenue, public services, and wider economic stability.
The OCAC is calling for stringent enforcement and stricter measures against smuggling. In addition, the letter underlines the need to secure the domestic oil industry, preventing the further erosion of earlier anti-smuggling gains.
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