Low sales at petrol pumps hint at widespread fuel smuggling

KARACHI: The retail petroleum sector continues to sell smuggled fuel as combined sales of motor spirit (MS) and high-speed diesel (HSD) at most outlets of oil marketing companies (OMCs) remain below levels needed to make operations financially viable.

Despite government efforts to curb smuggling and prevent tax evasion, internal assessments of petroleum product sales — primarily MS and HSD — indicate that average volumes at many OMC outlets are insufficient to cover the running costs of petrol stations. “This clearly suggests that these pumps are being supplied with smuggled petroleum products or sourcing from other OMCs,” industry officials said.

They disclosed that the average daily sales of MS and HSD for 24 OMCs stand below 2,500 litres, with some companies selling less than 500 litres per day. “It is obvious these stations are being supplied either smuggled products or fuel obtained from other OMCs,” they added.

Industry norms indicate that a petrol station is commercially viable only if daily sales exceed 5,000 litres in urban areas and 4,000 litres in rural locations. Officials also noted that some companies record negligible HSD sales, raising suspicions of smuggled diesel being sold instead of supplies sourced through legal channels.

Typically, the oil sector maintains that a reasonable OMC’s sales ratio is about 1.2 litres of HSD for every litre of MS. “However, if a pump shows a ratio of eight litres of MS to one litre of HSD, it points to smuggled or discounted fuel purchased from other OMCs,” they said, adding that this pattern is visible across many retail outlets.

According to a joint assessment by government and industry, Taj Gasoline recorded the highest average daily sales — 12,461 litres per pump — across 98 outlets between 1 July and 31 July 2025. It was followed by Fossil Energy at 8,662 litres (50 pumps), PGL at 6,204 litres (851 pumps), Pakistan State Oil (PSO) at nearly 6,000 litres (3,167 pumps), Vital Petroleum at 5,900 litres (123 pumps), and ECHO at 5,622 litres (nine pumps).

Other notable figures included Ahmad International at 5,556 litres (three pumps), Gas & Oil at 4,941 litres (1,268 pumps), Attock Petroleum at 4,800 litres (796 pumps), Flow Petroleum at 4,796 litres (264 pumps), My Petroleum at 4,689 litres (83 pumps), Euro Oil at 4,251 litres (158 pumps), Jinn Petroleum at 4,030 litres (88 pumps), Hi-Tech Lubricants at 4,016 litres (61 pumps) and Petrol Pakistan at 3,482 litres (eight pumps). The remaining 24 OMCs recorded significantly lower sales per day.