Petroleum Prices Set to Drop as Govt Moves to Curb Smuggling with New Tracking Law
In a significant move to combat fuel smuggling and adulteration, the federal government has introduced the Petroleum (Amendment) Act, 2025 in the National Assembly, paving the way for petroleum price reductions by addressing losses of Rs. 300–500 billion annually due to illicit practices.
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Key Reforms in the Amendment Act:
- Digital Tracking System: The bill mandates real-time IT-based tracking of petroleum products across transport vehicles, fuel stations, and storage facilities, enhancing transparency and curbing illegal trade.
- Seizure Powers: Deputy commissioners, assistant commissioners, and other designated officers are authorized to seize illegal fuel, equipment, storage, and vehicles under the Customs Act, 1969.
- Strict Penalties:
- Rs. 1 million fine for first-time offenders involved in illegal fuel trade.
- Rs. 5 million fine for repeat offenders.
- Rs. 10 million penalty, sealing of premises, and confiscation of tanks and machinery for operating unlicensed facilities.
- Rs. 100 million fine, license cancellation, and asset seizure for fuel stations selling smuggled fuel.
- Seizure of vehicles transporting illicit petroleum products.
- Expedited Licensing: The Department of Explosives is required to renew licenses within one month upon submission of documents and fee.
- Legal Oversight:
- Sessions courts will try violators.
- Enforcement led by deputy and assistant commissioners.
- Appeals permitted in high courts.
- Grace Period: Facilities with expired or cancelled licenses have six months to renew or face a Rs. 1 million fine.
Impact on Fuel Prices
By plugging major revenue leaks caused by smuggling and adulteration, the government expects to reduce costs and pass on relief to consumers in the form of lower petroleum prices. While exact price cuts have not been disclosed yet, analysts anticipate a decline once the system is enforced.
The amendment marks a landmark shift in petroleum regulation, aiming to ensure fuel quality, safeguard national revenue, and deliver price relief to the public.
