Pakistan to Deploy AI-Powered Digital Tracking to Curb Rs500bn Fuel Smuggling

In a major technology-driven reform, Pakistan will roll out an AI-enabled, real-time digital tracking system for petroleum products within a month. It is a first-of-its-kind initiative aimed at dismantling the country’s entrenched fuel smuggling and black-market networks.

The move follows the passage of the Petroleum (Amendment) Act 2025 by the National Assembly, which empowers authorities to monitor every litre of fuel from import and refining to storage, transport, and final sale. Officials say the system will integrate with multiple enforcement agencies and use GPS, IoT sensors, and centralised analytics to identify suspicious movements and irregular transactions.

According to government estimates, fuel smuggling, theft, adulteration, and tax evasion cause annual losses of Rs300–500 billion. The technology-led tracking platform, developed in collaboration with the Oil and Gas Regulatory Authority (Ogra) and industry stakeholders, will provide live data from petrol stations, oil tankers, and storage depots nationwide.

The amended law also grants enforcement powers to deputy commissioners, assistant commissioners, and Customs officials to seize smuggled fuel, shut down illegal facilities, and confiscate assets. Severe penalties, including fines of up to Rs100 million and permanent licence cancellations, have been introduced for repeat offenders.

A senior official said the system will “bring transparency, protect legitimate businesses, and close a gaping hole in Pakistan’s revenue stream” while improving fuel quality and reducing environmental hazards caused by adulterated petroleum.

Industry experts believe the initiative could serve as a blueprint for digitising other high-risk supply chains, with AI and IoT-based enforcement replacing outdated, paper-based oversight systems.

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