[HA_Law_Graduate]

Import and Storage of Petroleum in Pakistan: Law, Constitution, and Public Safety

Petroleum means any liquid hydrocarbon or mixture of hydrocarbons, and any inflammable mixture (liquid, viscous or solid) containing any liquid hydrocarbon. It fuels transport, industry, and energy. The law sets rules on import, storage, and use of petroleum in the Petroleum Act of 1934, along with the Petroleum Rules of 1937.

Petroleum is divided by flash point:

• Class A: below 23°C. Petrol, aviation fuel. Highly volatile.
  
• Class B: 23°C to 65°C. Kerosene.
  
• Class C: above 65°C. Diesel, furnace oil.
  

 
Import Regulation
Section 3 of the Petroleum Act imposes a simple condition, without a proper license no one shall import, store or transport any petroleum. To obtain a license one must comply with and follow the rules made under section 4.

The government makes the rules for providing and granting of combined licenses for the import, transport and storage of petroleum, or for any two of such purposes. There are certain forms of licenses relevant to petroleum they are:
·       Form K (For Grant of Petrol Pump Licenses)
·       Form L (For Bulk Storage of Petroleum Products)
·       Form M (For Godowns of Petroleum Products)
·       Form Q (For Transportation of Petroleum Products)

The licenses are managed by the Ministry of Energy (Petroleum Division) and OGRA. Customs ensures compliance at ports.

Storage Regulation

Control does not concern the imports only. Storage and transport are also concerned with and are equally regulated. Section 4 prohibits keeping petroleum beyond small exempted amounts without a license. The Petroleum Rules, 1937 provide technical standards.

• Tanks must meet approved design.
  
• Depots must maintain safe distance from dwellings.
  
• Firefighting systems, spill controls, and ventilation are mandatory.
  
• Lightning protection and grounding are required.
  

These safeguards are not formalities, they are legal duties and requirements that everyone is required to comply with, they give practical effect to Article 9 the protection of life.

Penalties

The Act prescribes strict sanctions and penalties, Section 23 of the act states that anyone in contravention of any provision in chapter I of the act, or in contravention of any rule under section 4 or 5, or refuses to comply with authorized officers and fulfill requirements needed by said officers, shall face imprisonment up to three years, a fine up to Rs. 10,000, or both. For continuing violations, fines increase by Rs. 1,000 per day.

In case of Illegally imported or stored petroleum, the petroleum shall be seized and Licenses may be suspended or revoked, with a punishment of fine of up to Rs. 1,000,000. The system is designed not only to punish illegal practices and noncompliance, but also to deter from unsafe practices.

Proposed Amendment:

In the recent proposed amendment of the Petroleum Act 1934, approved in August 2025 by Senate, a new clause (kk) was added in section 4, stating that the govt may make rules about prescribing real time and information technology enabled digital tracking, storage monitoring and dispensing of petroleum products at storage points and en route by coordinating actions of authorities.

Under section 23 sub section 3 clause (b) shall be replaced and state that anyone who repeat offense under subsection 3(a) shall be punishable by fine of up to Rs. 5,000,000. Under section 24(b)(2) any person aggrieved by decisions under section (1) may appeal in front of the concerned sessions court within 30 days.

The amendment also adds new sections:

3(A)- facility for storage and selling of petroleum products to the general public shall be liable to sealing and all machinery being seized and confiscated, with additional fine of up to Rs. 10,000,000.

3(B)- any facility operating under from K, upon expiry of the license has 6 months to renew the license before they are liable for closure and confiscation and a fine of Rs. 1,000,000.

3©- any facility with license and operating under section 4 involved in storage or sale of smuggled petroleum goods shall be liable to closure and a fine of Rs.100,000,000 and the cancelling of any team

3(D)- any means of transportation for smuggled petroleum products shall be liable to confiscation

3(E)- any goods confiscated by the authorised officers shall be handed over to the officers of customs in accordance with the customs act 1969.

In Pakistan, petroleum is more than a commodity. It is a constitutional concern. The Federal government holds authority, while the Petroleum Act of 1934 and Petroleum Rules of 1937 supply the operational code. Together they protect two basic guarantees: life and property.

Petroleum law, therefore, is not simply economic regulation. It is a framework for public safety.