A recent finding points out that Pakistan loses about $1 billion every year due to petroleum products (POL) smuggling. Such an economic deficit is a blow to the national economy because the smuggling activities are conducted on land and at sea.
Extent of the Petroleum Product SmugglingÂ
The Oil Companies Advisory Council (OCAC) reveals that approximately 10 million liters of petroleum products are smuggled into the United States daily. Accounting for about 20 percent of the annual consumption. The OCAC highlighted this critical issue to the Oil and Gas Regulatory Authority (OGRA) Chairman in a separate letter. The letter requests that the regulator swing into action regarding the recent increase in POL products. Human capital is any country’s most valuable asset, and this industry faces severe man-drain.
Cost of Government Revenues
In addition, the OCAC’s letter also mentions that under these circumstances, widespread smuggling is putting a strain on the government’s capacity to earn revenue from marketing the high-speed diesel and motor spirit (MS). This loss of income is especially troubling because there is a huge demand for such finances from the government to run the country. Further, in the case of petroleum products smuggling, as has been the case. The sale of such products has uncontrollably increased. The government cannot appear to catch a break when it comes to actually earning the foreign exchange it so sorely requires.
Return of Smuggling Actions
However, the surge in smuggled petroleum products, which followed the government’s report government’s handling early in the year, was short-lived. However, the OCAC has noted a disturbing return of smuggling activities for the past few months. This new inflow is bound to tense up the already bad situation. Making it more than necessary for the government to take urgent and tight measures against the illegal business.
Petroleum Product Smuggling: Effect of the Oil Supply Chain
The illegitimate influx of ‘smuggled oil’ products is going through the existing national oil supply chain. Including facilities like the White Oil Pipeline, refineries, and Oil Marketing Companies (OMCs) in Pakistan. If smuggling continues in such cases, it will likely destroy. The domestic refining industry further jeopardizes the country’s energy system.
Smuggling Petroleum Products seriously harms Pakistan’s oil market economy, oil industry revenues, and government. It is a dire situation, and illegal trade should be contained in all possible ways to avoid risking the economy and the country’s energy.
