ON an average, about 10 million litres of diesel and two million litres of petrol are smuggled every day into Pakistan from Iran. The price of one litre of high speed diesel (HSD) in Iran is the equivalent of around Rs15 which is way below the prevailing price in any country in the region. The differences in fuel prices between Iran and Pakistan have made smuggling a thriving business.

The main source in this regard is the sea route of Jiwani via Dasht river using speed boats all the way from Sistan in Iran to transport the commodity in cans. There are thousands of boats involved in the illegal operations. All along the coast, there are proper storage facilities as well as hotels to keep the well-oiled machinery moving.

Later, the cargo is moved in modified pick-ups and trucks to somewhere close to Gwadar, and from there it is moved, mostly in non-Custom-paid pickups, to the rest of Balochistan, as well as the bordering areas in Punjab and Sindh.

This is the only means of basic livelihood for a lot of people, but for many others it remains a lucrative opportunity to mint money right, left and centre. As things stand today, smuggling continues to undermine legitimate business activities, evade taxes, and fuel organised crime in Balochistan.

There are clear indications that smuggled fuel is largely meeting the demand in the current harvesting season across the country as diesel demand from formal sources has plunged massively. The month of March this year, for instance, witnessed only 12,000 metric tonnes (MT) of consumption despite the spike in demand due to wheat harvest in the southern parts of the country.

Diesel stocks in the country are said to have risen to 650,000MT, which is sufficient to meet national requirements for up to 44 days. The stock may see further surge as smuggled diesel is fast replacing what is churned out by the local refineries.

Apparently, the government is turning a blind eye towards the ongoing activity as the country is facing a dollar crunch and it is not in a position to import crude oil. The silence on the matter is a signal for the national oil industry from the relevant quarters to just go with the flow.

Dr Malik Safdar Finance Secretary

Oil Tanker Contractors Association Karachi

Published in Dawn, June 16th, 2023