Lawmakers support overhaul of petroleum legislation
Pakistan's Petroleum Amendment Bill 2025 Targets Fuel Smuggling and Modernizes Supply Chain
The National Assembly’s Standing Committee on Petroleum Division has recommended the passage of the Petroleum Amendment Bill 2025, with a focus on imposing tougher penalties on illegal fuel activities and modernizing Pakistan’s petroleum distribution through enhanced transparency, digitization, and effective regulatory oversight.
The Bill aims to curb fuel smuggling and unauthorized retail sales, which distort the market and hurt government revenues. Stricter punitive measures have been proposed, although the exact fines or imprisonment terms are not yet detailed in the available summaries. Owners involved in smuggling could potentially face fines of up to Rs100 million, while those running petrol stations after license cancellation would be fined Rs1 million.
To modernize the petroleum supply chain, the legislation emphasizes transparency and efficiency improvements. This includes the development of a track-and-trace system to monitor over 17,000 tankers from depots to pumps, the introduction of modern technologies, and updated regulatory frameworks for effective monitoring and control. Capacity-building measures and transparent use of funds related to CSR, training, and production bonuses are also planned.
The Ministry of Petroleum is working with the Punjab IT Board to digitize the oil supply chain, a crucial step towards achieving these goals. However, concerns have been raised about the lack of a clear implementation plan and the potential for additional financial burdens on the public. Lawmakers have urged the government to ensure transparency in the implementation of these tougher laws and to prevent misuse of the new regulations.
During the committee meeting, members criticized the absence of Petroleum Minister Ali Pervez Malik, with committee chair Syed Mustafa Mehmood stating that the ministry's absence signaled a lack of seriousness towards the committee's work. Committee member Qamar expressed similar concerns.
In addition, Shahid Khattak criticized the petroleum division for lacking a clear implementation plan, emphasizing the need for a comprehensive strategy to address the challenges posed by the Bill.
The Petroleum Amendment Bill 2025 updates the Petroleum Act 1934 and proposes the seizure of vehicles and equipment used in fuel smuggling and unauthorized sales. Machinery and storage tanks linked to such activities would also be confiscated.
In summary, the Petroleum Amendment Bill 2025 seeks to address long-standing issues in Pakistan’s petroleum sector by imposing tougher penalties on illegal activities and modernizing the supply chain. While the specifics of the penalties and operational changes are yet to be fully disclosed, the Bill represents a significant step towards combating fuel smuggling and ensuring a more efficient and transparent petroleum sector in Pakistan.
The Petroleum Amendment Bill 2025, targeting Pakistan, aims to impose stricter penalties on illegal fuel activities and modernize the national petroleum industry. The US and other global partners may find this reform significant for Pakistan's fight against fuel smuggling and for the overall improvement of the petroleum industry's transparency. The Bill's modernization efforts include digitization of the oil supply chain, which is being undertaken in partnership with the Punjab IT Board, and the development of a track-and-trace system. The Bill also proposes the confiscation of vehicles and equipment used in fuel smuggling, suggesting that the global finance industry should monitor potential changes in Pakistan's illegal fuel market. The implementation of the Bill, however, remains a concern for some lawmakers, as they advocate for a comprehensive strategy and transparent execution to ensure its success.
