Petrol dealers warn proposed bill could undermine legal fuel trade

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Arachi: The All Pakistan Petroleum Dealers Association (APPDA) has issued a strong warning about the proposed Petroleum (Amendment) Act 2025, stating that the purpose of the bill is to stop fuel trafficking, but instead it can punish the law and order the law -abiding petitioners.

Addressing the fuel station owners on Friday, APPDA spokesman Hassan Shah said the bill offers powers to local authorities without judicial supervision or regulatory checks. He warned that this could lead to oppression, misuse, and “wandering” arms of retailers to meet the goals of enforcement.

Pakistan has more than 11,800 registered petrol pumps, of which more than 83 % of independent retailers run. These outlets work as commission agents under licensed oil marketing companies (OMCS) and have no role in fuel import, production or blend.

Nevertheless, the proposed amendments impose a strict responsibility on retailers and allow district officials to seal, impose fines, or seize assets – often without wrongdoing or before evidence of notice.

Shah warned, “If it was approved in its current form, this bill would blame dealers for their control, while smugglers and unorganized distributors have been left out.” Recent estimates suggest that 10 million liters of Iranian petrol and diesel are smuggled into the country daily, resulting in loss of more than Rs 27 billion in annual taxes. In Balochistan alone, the illegal fuel trade is estimated at 400 million – it is almost three times higher than the legal trade volume of the province. The Advisory Council of Oil Companies (OCAC) has flagged Rs 1.5 billion daily to the national exchequer from illegal petroleum trade.

Shah emphasized that although petrol dealers strongly oppose smuggling, implementation should be targeted and transparent. In his formal communication with government officials, the APPDA has recommended a number of significant reviews in the bill.

These include that retailers should be held responsible only when there is clear evidence of advance information or direct involvement in illegal activity. Accountability should be established at the already related OMC level before taking any pending action against the pump operators. The APPDA has also demanded that no sealing, fines, or conflict be allowed without any advance information, investigation, and formal documents – except in situations that are immediately public threats.

In addition, the Association has suggested that the Oil and Gas Regulatory Authority (OGRA) be confirmed as the primary regulatory body, in which the implementation operations are formally stated within 48 hours. It also demanded the establishment of a petroleum retailers’ complaint committee (PRGRC) to provide a platform for appeals and temporary operational relief during the dispute. Retailers working as whistlers should be given privacy and immunity. In cases where government officials violate the procedure security measures, they should face discipline, and the affected petrol pump owners will have to pay compensation. The APPDA further emphasized that parts should be modified as 23 (3A-3C) to remove strict responsibility, which requires evidence of intent or collusion. In addition, Section 4 (KK) should provide grace period for the implementation of the digital tracking system.

Despite the increase in illegal fuel trade, Pakistan’s petroleum sales are 1.58 million tonnes at the end of 2024 at the end of 2024, leading to the target crackdown and fuel prices. However, industry stakeholders have warned that if legitimate operators are pushed, this progress can be overcome.