ISLAMABAD, MAY 16: /DNA/ – The All Pakistan Petroleum Dealers Association (APPDA) has issued a strong warning against the proposed Petroleum (Amendment) Act 2025, arguing that while the legislation aims to curb fuel smuggling, it could penalize law-abiding petrol retailers and destabilize the national energy supply chain.
Speaking to fuel station owners on Friday, APPDA Spokesman Hassan Shah said the bill grants sweeping and unchecked powers to local administrations, such as Assistant Commissioners and Deputy Commissioners, without judicial oversight or regulatory checks. He warned that such provisions leave room for coercion, misuse, and “arm-twisting” of dealers to meet arbitrary enforcement targets.
“Petrol dealers have invested billions in infrastructure across Pakistan. This bill threatens that investment by granting executive powers without accountability. That’s not regulation, it’s intimidation,” Shah stated.
Pakistan has over 11,800 registered petrol pumps, with over 83% operated by independent retailers. These businesses function as commission agents under licensed Oil Marketing Companies (OMCs), with no role in fuel importation, production, or adulteration.
Despite this, the proposed amendments place strict liability on retailers and empower district officials to seal stations, impose heavy fines, or confiscate assets, often without proof of wrongdoing or prior notice.
“If passed in its current form, this bill would make dealers liable for issues beyond their control, while leaving the real culprits, smugglers and unregulated distributors, untouched,” Shah said.
APPDA’s concern is heightened by the scale of fuel smuggling in Pakistan. Recent estimates show that over 10 million litres of Iranian petrol and diesel are smuggled into the country daily, causing annual tax revenue losses exceeding Rs 227 billion. The illegal fuel trade in Balochistan is worth $400 million, almost triple the province’s legal trade volume.
The Oil Companies Advisory Council (OCAC) has also flagged Rs1.5 billion daily loss to the national exchequer from the illicit trade in petroleum products.
He stated that they firmly oppose smuggling, as petrol dealers are among the primary victims of this unlawful activity. Therefore, enforcement must be targeted and transparent.
The APPDA has urged key amendments to the proposed bill, including limiting retailer liability to cases with proven intent or involvement, holding OMCs accountable before penalizing pump operators, and prohibiting sealing or fines without due process, except in emergencies.
They also demand OGRA’s reinstatement as the lead regulator with 48-hour reporting of actions, formation of a Petroleum Retailers Grievance Committee, whistleblower protections, penalties for officials violating procedures, and compensation for wronged retailers. Amendments to Sections 23(3A–3C) are sought to eliminate strict liability, and a grace period is requested under Section 4(kk) for digital tracking implementation.
Major Naveed Suleman Malik (Retd) also addressed the gathering, stating that executive powers should be exercised only after a proper inquiry and with judicial authorization.
“We support strong action against fuel smuggling, but not at the cost of legal businesses. There must be a clear distinction between criminals and commission-based retailers who operate under strict controls,” Malik said.
Despite the surge in illegal fuel trade, Pakistan’s petroleum sales in late 2024 reached a 25-month high of 1.58 million tonnes, partly due to targeted crackdowns and declining fuel prices. Industry stakeholders caution that such progress could be reversed if legitimate operators are undermined.
“We are not against regulation, we are against regulation without reason,” Shah said. This bill, without amendments, risks punishing the very people who keep Pakistan fueled, while the actual smugglers continue unbothered.
APPDA has urged the government to initiate urgent consultations with all stakeholders and consider revising the bill through supplementary legislation or executive rules before proceeding to implementation.
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