ISLAMABAD - Following the unprecedented hike in the prices of petroleum products , sale of smuggled petrol and diesel in Balochistan, Sindh, Khyber Pakhtunkhwa and South Punjab has reached at its peak, which would cause above Rs20 billion annual loss to national kitty.
With the start of ongoing month of October, PML-N government had jacked up the prices of petroleum products from October 1 under monthly oil price review mechanism. Petrol price went up by Rs4.12 per litre, kerosene by Rs2.14, diesel (HSD) by Rs4.69, light diesel by Rs2.83 and high octane blended component (HOBC) by Rs5.57. With this massive hike, the new per litre price of petrol is Rs113.25, HSD Rs116.95, LDO Rs101.24, kerosene Rs108.13 and HOBC Rs143.90. Different opposition parties and religious groups including PPP, PTI, ANP, MQM, JI rejected the price hike for POL, declaring them ‘anti-people’. There have also been public protest demonstrations in different areas of the country over the issue. But the government did not accept the demands of the parliamentarians and people to withdraw the price increase in oil sectors. Even, the government did not decrease the petroleum levy imposed on POL products and not provided significant subsidy to the consumers to provide them a sigh of relief and also set aside recommendations of oil and gas regulatory authority (Ogra).
Viewing the deteriorated law and order situations coupled with ugly alleged connivance of tribal lords with the mighty smugglers in the wake of zero check and balance from the bordering security forces of each side of the said countries, the oil smugglers have swung into action and speeded up the oil smuggling from neighbouring Iran and Afghanistan to the Pakistan, which has reached at its peak now a days, causing hefty losses to national kitty, sources said on Sunday.
Economic pundits well aware of the impact of unresolved and unprecedented oil smuggling to Pakistan from bordering countries including Iran and Afghanistan etc. have disclosed that recent massive hike of up to Rs5.57 per litre in POL price effective from October 1 has ostensibly fasten the speed of sale of smuggled oil. Apparently being major reason behind the menace of open sale of smuggled oil in various parts of the country and also it’s smuggling in broad daylight from neighbouring brethren countries to Pakistan has been causing heavy annual losses to the national exchequer for a long time. Oil smugglers and dealers of smuggled oil usually grease the palms of influential to avoid any untoward incident. Similarly, due to alleged connivance of bordering security forces and local influential-landlords, tribal lords, chieftains etc of each side of the said countries, it has reached at its top now a day. Upon this, the oil dealers association has asked the ministry of petroleum and natural resources to take prompt and stern actions against the ‘oil smuggling mafia and dealers of smuggled oil’.
Urging from the petroleum ministry to play a due role in curbing the menace of smuggling and taking necessary measures to immediately stop sale of smuggled oil, the oil dealers in their request has further highlighted that so far the annual sale of smuggled oil in the country had reached at 1.5 billion litre. The oil dealers in their repeated humble plea to the ministry has further pointed out that sale and smuggling of petrol and diesel has reached at record high level in different parts of Balochistan, Sindh, Khyber Pakhtunkhwa and south Punjab. Since the smuggled oil is being sold at less than Rs10/litre to the consumers if compare it with the ex-depot price of fuel, so its sale has taken a momentum which would prove as a serious blow to the fragile economy of the country struggling hard for revival.
“Zero percent recovery of revenue from smuggled oil to the state would also put a negative impact on the country’s economy, which would ultimately force the government to borrow more and more from the banking system, leading to accentuation of price pressures, depreciation of rupee and possibly a rupture of present relationship with the IMF,” an economic expert warned.
A senior official confirming the info, told that the petroleum ministry has given its assurance to the oil dealers association that it would leave no stone unturned to uproot the menace, which is causing colossal loss to country’s economy. Taking action on the persistent complaints of oil dealers, the petroleum ministry has dispatched a letter to the provincial assemblies asking them all to take concrete efforts to stop the oil smuggling and its sale immediately.
“Due to zero recovery under the head grand sale tax (GST) and petroleum levy (PL) from smuggled diesel and petrol, the country is suffering with a heavy loss of Rs20 billion annually largely due to uncontrolled and unchecked smuggling of petrol and diesel,” he said, adding,” All four provincial governments have been requested to take action and initiate campaigns against the oil smugglers and sale of smuggled petrol and diesel.”
It is worth mentioning that on finding no respite from the incumbent regime amid high inflation, high hopes of over burdened common public already bearing heavy brunt of sky-high prices of POL, power, gas, essential commodities etc have shattered which has seriously damaged the popularity of the Nawaz government after passing just four months. The massive increase in oil prices has multiplied the cost of doing business, affecting the productivity of economy and competitiveness of exports and depriving the country of the precious foreign exchange earnings. And, zero revenue recovery on account of PL or General Sales Tax (GST) already imposed on POL would definitely put a negative impact on the country’s economy, forcing the government to borrow more and more from the banking system, leading to accentuation of price pressures, and depreciation of rupee, which would resultantly stifle economic growth.