EconomyPakistan

IMF Raises Alarm on Petroleum Smuggling in Pakistan

The International Monetary Fund (IMF) has voiced its concerns regarding the extensive smuggling of petroleum products in Pakistan, leading to losses surpassing $10 billion. In light of this, the global lender is seeking an explanation from both the Finance Ministry and the Federal Board of Revenue (FBR).

Sources indicate that the country faces a monthly smuggling of a staggering 143 million liters of petroleum products. The IMF, disturbed by these figures, is keen to understand the steps the government has undertaken to curb this illicit activity.

Just a week ago, the caretaker government declared a massive crackdown on oil smuggling, majorly from Iran. On September 9, a significant disclosure was made by a sensitive agency’s report, highlighting the inflow of about 10 million liters of Iranian oil into Pakistan each month. This illegal operation sees the oil transported to the border regions of Rakhni, Loralai, Mekhtar, and Bawata. The Sakhi Sarwar checkpost in Dera Ghazi Khan acts as a distribution point, sending these supplies throughout the country.

The report shockingly unveiled that officials from the Border Military Police could be benefiting from this trade, allegedly receiving between Rs150 to Rs200 million for a convoy of 100 to 150 trucks. With each truck holding 8,000 to 10,000 liters of oil, and minimal checks on the motorway, this smuggling route remains largely unobstructed.

Another concerning revelation was that many petrol pump owners are making a fortune by adulterating their supplies, blending in 30% to 40% of this smuggled Iranian oil.

An additional report, targeting the vast network of smuggling in Pakistan, has been submitted to the Prime Minister's office. This report not only delves into the smuggling of Iranian oil but also shines a light on the hawala/hundi dealings. This report identifies 722 currency dealers in the country involved in such illicit trade. A significant portion of these dealers are based in Punjab, Khyber Pakhtunkhwa, and Sindh.

Highlighting the economic impact, the report estimates that more than 2.81 billion liters of oil are smuggled annually from Iran to Pakistan, causing financial losses of over Rs60 billion each year.

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