Petroleum dealers fear unfair crackdowns under new amendment

In a bid to oppose the proposed Petroleum (Amendment) Act 2025, the All Pakistan Petroleum Dealers Association (APPDA) has claimed that the proposed amendment could detrimentally affect the business operations of upstanding petroleum retailers. The amendment in question aims to crack down on fuel smuggling and adulteration tactics; however, the APPDA suggests that it could result in a disruption of the energy supply chain.

Earlier this week, Islamabad decided to introduce the bill in the National Assembly in an attempt to digitally track etroleum products in various stages of the production process. According to reports, officials intended to introduce tracking mechanisms from import and production to retail sales.

The introduction of the clauses to the amendment means that if passed, they will grant government officials, such as deputy and assistant commissioners, along with a handful of other officers, the power to confiscate fuel, machinery and the equipment of fuel vendors who are not abiding by the law.

However, interviews with reputable reporting institutions have revealed their fears surrounding the vesting of such sweeping powers in government officials. According to pump owners, the devolution of such power to administrators, coupled with the lack of regulatory checks and oversight, is likely to result in unfair outcomes for them.

As per reports, pump owners feel that the proposed amendment creates an environment wherein they will be exposed to coercion simply for authorities to reach their “enforcement targets”. Moreover, an owner also logged their resentment in an interview, reiterating how they have collectively poured billions into investment across the country. 

However, the federal government has reasons to propose the amendment. Reports indicate that an estimated 10 million litres of Iranian diesel and petrol are smuggled into the country, detrimentally impacting the national exchequer, as smuggled petroleum evades taxes and duties. 

This phenomenon results in the national exchequer losing out on a staggering Rs300 to Rs500 in annual tax revenue. Moreover, smuggled petroleum evades taxes and duties, allowing for the generation of supernormal profits for all those involved in the malpractice.

If implemented with integrity, the amendment will actually shield pump owners complying with the law. This is because ensuring that every entity is subject to the same rules will reduce the upside of not cooperating with the law, as the opportunity to generate supernormal profits by engaging in illegal activities will not seem as attractive given the possibility of facing a fine.