Oil Smuggling Costs Pakistan Rs. 250 Billion: OMAP

According to a group of minor oil marketing organizations, Pakistan loses Rs. 250 billion each year as a result of the smuggling of gasoline and diesel.

In response to officials beginning an audit of the downstream oil sector, the Oil Marketing Association of Pakistan (OMAP) released a press release.

This is the latest in a series of audits of the industry that have been carried out by the government since the middle of 2020.

Regarding smuggling, the OMAP stated that it recognizes that this is a major issue, and that, according to the Inquiry Commission Report, “we are losing an estimated Rs. 250 billion per annum as a result of the menace of smuggling.”

In its explanation, the company stated that smuggling of gasoline and high-speed diesel has been a significant problem for more than a decade because it results in the selling of low-quality products.

“The octane value of the gasoline is far lower than the 90 RON minimum specified for our market and is in fact naphtha of 60-70 RON,” the company revealed.

Furthermore, the price of such smuggled products is substantially lower than the market price, which serves to further accelerate the trade.

According to the OMAP, the government has failed to handle the issue of smuggling as a result of inadequate security and “suspected complicity between the traffickers and the local authorities.”

According to the organisation, officials’ audits initiated last year were unrelated to the issue of smuggling and were merely harming the companies’ reputations as well as preventing investors from participating in them.

The report states that just two of Pakistan’s six refineries are addressed, and that of the country’s 23 oil marketing companies, 60 percent have individual market shares of less than 0.5 percent.

OGRA already had a system of checks and balances in place, according to the firms, in which data on the downstream oil sector was evaluated by its independent auditors, which they claimed was already in place.

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