Fueling Reform: Pakistan’s Digital Drive Transforms Petroleum Sector

At a time when governance and transparency dominate public discourse, the Government of Pakistan’s recent reforms in the petroleum sector offer a clear and encouraging signal: the government is not only identifying long-standing structural problems but is also addressing them with modern, technology-driven solutions. These initiatives reflect a government that is working with clarity of purpose and a long-term vision for reform.

The nationwide digitalization drive across the petroleum supply chain is particularly significant. By integrating imports, refineries, transportation, and retail outlets through a comprehensive track-and-trace system, the government is laying the foundation for real-time monitoring and accountability. This approach directly targets fuel smuggling and illegal sales issues that have cost the national exchequer billions and distorted the market for years. More importantly, it protects the interests of authorized dealers and ensures fair competition.

The launch of Raahguzar mobile application to help consumers locate legal fuel stations is a practical, citizen-centric reform. For the first time, consumers have access to verified information about legally operating petrol pumps across the country. This not only empowers the public but also strengthens regulatory oversight through transparency. Such initiatives demonstrate that reform is not confined to policy documents but is being translated into tools that deliver real value on the ground.

Equally significant is the development of a unified Track and Trace System for tank lorries in collaboration with the Punjab Information Technology Board. By integrating ERP data, vehicle movement, terminals, and retail outlets into a single platform, the initiative represents a decisive move away from fragmented oversight toward coordinated and effective regulation of fuel transportation and distribution.

Building on this framework, the planned installation of automatic tank gauges and digital dispensing units at petrol pumps reflects a strong commitment to strengthening transparency and accountability in the downstream sector. These measures are intended to ensure accurate reporting of fuel volumes, minimize leakages, and reinforce regulatory oversight across the retail network.

In the upstream domain, the government has revived investor confidence by successfully conducting an offshore bidding round. Keeping in view the Prime Minister’s vision of indoctrinating energy security, enhancing indigenization and promoting local resource development, the Petroleum Division, Government of Pakistan announced the results of the competitive Offshore Bid Round 2025, this year after a gap of 18 years for the grant of petroleum exploration licenses attracting bids for 23 exploration blocks, covering a total area of approximately 53,510 square kilometers.

During Phase-I, the companies will undertake comprehensive geophysical and geological (G&G) studies, including seismic data acquisition, processing, and interpretation, to better define the hydrocarbon potential of Pakistan’s offshore basins. Upon completion of these studies, the Phase-II work program will be finalized which will include drilling of exploratory wells in the prospective areas.

Pakistan’s leading exploration companies, OGDCL and PPL, Mari Energies have joined Turkish Petroleum (TPAO) which is creating new opportunities for joint ventures and strengthen cooperation on the global stage. During the recent visit of Turkish Minister of Energy Turkiye and Pakistan signed five agreements in onshore and offshore exploration. The signing ceremony was witnessed by Prime Minister Muhammad Shehbaz Sharif.

Director General Petroleum Concessions is launching a fully digital bidding portal for exploration sector. By replacing manual processes with an online system, the regulator is institutionalizing transparency and efficiency which are the key prerequisites for attracting sustained domestic and foreign investment.

These measures are expected to deliver benefits, including improved transparency through end-to-end digital bidding and evaluation. By reducing processing time and eliminating manual paperwork, the new system enhances operational efficiency while allowing bidders to participate remotely through a single, secure platform. Standardized workflows and built-in audit trails strengthen governance and regulatory compliance, while fair, transparent, and predictable processes aligned with international best practices are likely to boost investor confidence.

The reform agenda also extends to areas often overlooked in public debate. The Explosives Track and Trace System (ETTS), now implemented in phases, introduces real-time monitoring across the explosives supply chain. This enhances safety, prevents pilferage, and strengthens accountability, reflecting a comprehensive approach to regulation rather than piecemeal intervention.

Crucially, these technological advancements are backed by strong legal reforms. Amendments to the Petroleum Act, 1934 provide the necessary enforcement framework, including IT-based tracking, confiscation powers under the Customs Act, 1969, and stringent penalties against illegal practices.

In the gas sector, the introduction of long-term demand and supply models, pricing frameworks, and circular debt reporting tools further reinforces transparency and financial discipline being the areas critical to sustainable energy planning.

The concrete steps in the petroleum sector put weight to government’s claims of transformation and demonstrate that with the right policy direction structural challenges can be addressed.