‘Pakistan is losing an estimated Rs. 250 billion per annum due to petrol, diesel smuggling’

The OMAP is disappointed with the government's efforts.

'Pakistan is losing an estimated Rs. 250 billion per annum due to petrol, diesel smuggling'

Latest reports have unveiled that Pakistan has been losing Rs. 250 billion annually due to the smuggling of petrol and diesel.

The Oil Marketing Association of Pakistan (OMAP) issued a statement regarding the smuggling, which read:

Smuggling of petrol and high-speed diesel has been a severe issue for over a decade; it has been resulting in sales of poor quality products. As per the Inquiry Commission Report, we are losing an estimated Rs. 250 billion per annum due to the menace of smuggling.

The press release further stated:

The petrol octane value is much below the 90 RON minimum specified for our market and is, in fact, naphtha of 60-70 RON. Additionally, the price of such smuggled products is significantly below the market price, accelerating the trade even more.

To cater to diesel smuggling, the government has ordered another audit of the oil sector.

Government’s efforts to counter the problem

To counter this loss, the government has ordered another audit of the downstream oil sector. It is pertinent to mention the government has been conducting a series of audits since mid-2020 to find a possible solution to fuel smuggling, but all efforts seem to have fallen flat.

The OMAP is disappointed with the government’s efforts. Criticizing the series of audits, the officials said:

The government has failed to address the issue of smuggling due to weak security and suspected collusion between the smugglers and the local authorities. The series of audits that the government officials launched last year were unrelated to smuggling and were only damaging the companies’ images and discouraging investors.

The OMAP further claimed:

Of the six refineries of Pakistan, only two are addressed, and of the 23 Oil Marketing Companies, 60 percent are those with individual market shares of less than 0.5 percent. The Oil and Gas Regulatory Authority (OGRA) has already been operating a system of checks and balances to deal with smuggling. In this system, the data on the downstream oil sector is scrutinized by its independent auditors.

Concluding the official statement, the OMAP questioned that the OGRA system checks and maintains all fuel sales data, so how is smuggling unidentified. The OMAP officials stated:

The data, including sales, imports, and local refinery production, is documented and checked by the regulator through this system. The deemed duty collected is also recorded and audited by the Petroleum Division.

The OMAP officials have openly criticized the government and OGRA for not finding a solution to annual petrol and diesel smuggling. However, the two bodies haven’t issued a statement in reply to the blame. Authorities hope that the latest audit provides some answers that help highlight a possible solution to fuel smuggling.

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