The Oil and Gas Regulatory Authority (Ogra) has requested comprehensive records of petrol and high-speed diesel (HSD) supplies from refineries to oil marketing companies (OMCs) as part of the government’s renewed effort to combat the smuggling of petroleum products in Pakistan.
In a recent letter to the country’s refineries, Ogra outlined the federal government’s establishment of a committee dedicated to tackling smuggling and addressing the associated revenue losses. The regulatory body has asked refineries to provide detailed supply records to OMCs from January to August of this year.
This initiative comes at a critical time, as revenue loss remains a significant concern for the government, which urgently needs financial resources. The smuggling of petroleum products has complicated operations for both the refining sector and OMCs. The information requested by Ogra is expected to clarify discrepancies between what is supplied to OMCs and what is sold by petroleum dealers at their outlets.
While the supply of petroleum products from refineries to OMCs is well-documented, there is concern that OMCs may not be directly involved in smuggling. Instead, the issue may lie with dealers who mix smuggled products with legal ones for sale. The new government measures aim to verify actual supply levels and sales at retail outlets.
The legal sale of HSD is approximately 16,000 metric tonnes (Mt) per day, while petrol sales are around 22,000 Mt per day. Smuggled petroleum products are estimated to capture 30 to 40 percent of the domestic market, continuing to pose challenges despite previous efforts to address the issue.
In August of this fiscal year, petroleum product sales fell to 1.22 million tonnes (Mt) from 1.41 Mt in August of the previous fiscal year, marking a 14 percent drop. However, on a month-to-month basis, there was a 2 percent increase in sales from July to August of this fiscal year.
Over the first two months of this financial year, petroleum product sales declined significantly by 12 percent, totaling 2.41 Mt compared to 2.76 Mt during the same period last fiscal year.
