Iranian oil smuggling disrupts local refineries, raises alarm to OGRA

Pakistan’s weekly oil import bill has increased from $300 million to $800 million after the closure of the Strait of Hormuz, but another major problem has emerged in this difficult situation. Cheap oil smuggled from Iran has flooded the Pakistani market so much that local refineries have written a formal letter to OGRA, sounding the alarm.

PARCO, Pakistan Refinery Limited, National Refinery and Attock Refinery have said in a joint letter that smuggled Iranian oil has become a serious threat to their production and business. The refineries are of the opinion that instead of reducing local production, the government should take strict measures to stop illegal oil at the border.

The figures show the seriousness of the situation. About 5,000 tons of smuggled diesel is coming to Pakistan every day, which is 23 percent of the country’s total High Speed ​​Diesel demand. The government is losing about Rs80 per liter in Petroleum Levy and Custom Duty.
In 2024, intelligence agencies uncovered a major smuggling network comprising 738 petrol pumps, which was causing an annual loss of Rs227 billion to the national exchequer.

The Balochistan government’s proposal to allow the sale of Iranian diesel in the province at Rs280 per liter has further raised concerns in industry circles. Refinery owners have warned that if the trend is not stopped, their billions of dollars of investment could be at risk. Meanwhile, Saudi Arabia and Kuwait have increased oil supplies to Pakistan in recent days to avert a potential crisis.