ABS & Co has examined the growing regulatory concern surrounding the use of petroleum legislation to govern synthetic chemicals and petrochemical inputs used across Pakistan’s industrial sector. As Pakistan works toward economic revival, the correct and consistent application of laws, policies and treaty commitments is critical. However, the expanding reach of petroleum laws into areas traditionally regulated by chemical-specific frameworks has created uncertainty for manufacturers and importers.
ABS & Co notes that the Petroleum Act, 1934 was designed to regulate petroleum and petroleum-related substances. Its application to synthetic chemicals solely based on flashpoint characteristics raises significant legal questions. These chemicals differ fundamentally from petroleum products, and their forced classification under petroleum-specific rules imposes unjustified compliance burdens on industries that rely on synthetic raw materials. Such misapplication not only stretches the statutory purpose of the Act but also disrupts regulatory predictability for businesses.
Under the Rules of Business, 1973, the mandate of the Petroleum Division is expressly limited to matters relating to oil, gas and minerals. Synthetic chemicals fall outside this mandate and are instead governed by other statutory instruments. These include the Chemical Weapons Convention Implementation Ordinance, 2001, which regulates scheduled and discrete organic chemicals, and the Pakistan Environmental Protection Act, 1997, which addresses environmental and safety considerations applicable to chemical handling, transport and storage. ABS & Co’s review shows that these frameworks already provide more appropriate mechanisms for regulating industrial chemicals.
A long-pending reform, the Hazardous Substance Rules, proposes a dedicated and modern regulatory regime for non-petroleum synthetic chemicals. Once enacted, these rules would introduce a standalone licensing structure, notification requirements and accident-prevention systems. ABS & Co considers this approach more aligned with international best practices and better suited to ensuring legal clarity, industrial safety and regulatory consistency across sectors.
The ABS & Co team working on this matter was led by Partners Ayasha Warsi and Amna Warsi.
