OMAP Calls For Action To Curb Smuggling Of Iranian Fuel

Oil Marketing Association of Pakistan says unchecked illegal activity is wreaking havoc on the nation’s energy sector and causing substantial economic damage

LAHORE: (UrduPoint/UrduPoint / Pakistan Point News-April 9^th, 2025) The Oil Marketing Association of Pakistan (OMAP) has issued an urgent appeal to the Oil and Gas Regulatory Authority (OGRA) and other concerned authorities to take immediate steps to address the growing threat of smuggling Iranian petroleum products, including diesel, petrol, and solvents, into Pakistan. The unchecked illegal activity is wreaking havoc on the nation’s energy sector and causing substantial economic damage.

OMAP has called for an urgent stakeholders’ meeting to develop effective solutions to this critical issue. The association stresses that immediate and coordinated action is needed to prevent further damage to Pakistan's economy and to safeguard the integrity of the country’s regulated fuel sector.

In this regard, OMAP’s Chairman, Tariq Wazir Ali wrote a letter to Chairman OGRA Masroor Ahmad and said that this smuggling operation is placing legal Oil Marketing Companies (OMCs) at a severe disadvantage. Legitimate companies invest heavily in infrastructure, logistics, and compliance with regulatory standards, all while paying significant taxes. In contrast, smuggled products bypass customs duties and taxes, leading to unfair competition.

Tariq Wazir also highlights the dire consequences for Pakistan’s legal fuel market. Smuggled fuel is much cheaper due to the absence of taxes, undermining lawful businesses. The prevalence of smuggled fuel leads to the closure of legal retail outlets, resulting in significant job losses. The illegal trade also creates an unstable market, diminishing investor confidence in the sector.

He went on to say that the financial repercussions of fuel smuggling extend far beyond the oil sector. The government is losing vital revenue as smuggled fuel bypasses taxes and duties. The sale of smuggled fuel undermines OGRA’s regulated pricing framework, creating instability in the market. Additionally, payments for illicit fuel are made through informal channels, draining the country’s foreign exchange reserves.

Tariq Wazir ali pointed out that the smuggling of Iranian fuel also poses significant risks to national security and the environment. Smuggled fuel is often transported and stored in unsafe conditions, resulting in environmental hazards. Non-compliant Iranian fuel harms vehicle performance and contributes to pollution. The illegal fuel trade is often linked to organized crime syndicates, further jeopardizing national security.

He added that in light of these challenges, OMAP is urging OGRA and other authorities to implement a series of immediate measures to combat the growing threat of fuel smuggling. OMAP calls for enhanced enforcement at border entry points to strengthen customs and border controls, preventing smuggled fuel from entering the country, he said adding that the association also recommends regulating unauthorized fuel sales and closing loopholes that facilitate smuggling.

OMAP stresses the need to tighten control over the use of legal OMC documents to ensure that they are not used to facilitate the decanting of smuggled fuel, he said.

Chairman OMAP also called for a crackdown on illegal fuel stations, particularly in remote areas such as Baluchistan and KPK. Strict controls at border districts should be enforced to prevent fuel diversion to other regions. The association encourages collaboration with agencies such as FIA and FBR to dismantle smuggling networks and suggests the implementation of electronic surveillance and tracking systems to monitor petroleum transportation.

He further advocates for public awareness campaigns to educate the public about the risks of smuggled fuel and the importance of supporting legal businesses. To deter illegal activity, OMAP proposes increasing fines, confiscations, and penalties for those involved in the illicit fuel trade, as well as a revision of policies to prevent further revenue losses.