Tensions between the two nations have been rising over a de facto fuel export ban by Iran, but Afghan President Hamid Karzai said on Tuesday he had received an assurance from the Iranian ambassador in Kabul that the issue would be resolved in days. – Photo by AP

KABUL: Afghanistan's trade associations say they have halted trade with neighbouring Iran to protest against an unexplained fuel blockade which has been choking the Afghan economy, the groups' leaders said on Tuesday.

Tensions between the two nations have been rising over a de facto fuel export ban by Iran, but Afghan President Hamid Karzai said on Tuesday he had received an assurance from the Iranian ambassador in Kabul that the issue would be resolved in days.

The ban had stranded nearly 2,000 tankers at the border earlier this week and pushed up fuel prices around Afghanistan. Only around 40 trucks were being allowed across each day.

The President of the Afghan Chamber of Commerce, Qurban Haqjo, said thousands of independent traders have agreed to halt trade with Iran to protest the problems caused by the ban.

If fully implemented the pact could suspend deals worth millions of dollars, and possibly damage the weak Afghan economy.

“It is an independent decision by Afghan traders, and the ban starts from today,” Haqjo told a news conference in Kabul, adding that the government should encourage domestic production to fill the gap left by a dearth of Iranian imports.

“This could badly hurt both Iran and Afghanistan but we hadno other choice,” Haqjo said. Also at the gathering were the heads of 21 traders' associations, representing importers and exporters of everything from dried fruit to gemstones.

Later on Tuesday, a statement from President Karzai's office quoted Iranian ambassador Fida Hussain Maliki as saying 929 tankers had entered Afghanistan over the past 25 days and that the backlog would be cleared within the next four days.

Iranian news agency ISNA, quoting the Iranian embassy in Kabul, said only 160 fuel tankers were now waiting to cross the border and would do so “in the next few days after legal procedures are carried out.”

The Afghan Chamber of Commerce last week said it was told by Iranian officials the tankers were delayed because Tehran believed the fuel was destined for U.S. and NATO forces, which are fighting a resilient insurgency.

But NATO has repeatedly said it does not get any fuel supplies via Iran.

MILLIONS OF DOLLARS AT STAKE

Haqjo did not say how the plan to halt trade would be monitored, or comment on what level of losses traders might be able to absorb before being forced back into the market.

He said estimates put Iran's annual imports to Afghanistan at over $800 million -- including cloth, food items, detergents and other accessories. Afghan exports are worth about $50 million annually, and are mostly rugs and gems.

“I will scrap a five ton diesel deal with Iran,” said Hataee, an Afghan trader who goes by one name.

Landlocked Afghanistan has little industry and is only now starting energy extraction, so it relies heavily on transit routes from neighbouring nations to bolster supplies of food, fuel and manufactured goods.

Afghan Commerce Minister Anwar-ul-Haq Ahadi said more than 40 per cent of Afghan oil comes through the Iranian border. The severing of that supply has caused prices to rise most dramatically in provinces near the Iranian border -- in some cases by up to 35 per cent.

Kabul has asked Kazakhstan to sell some 200,000 tons of fuel and private sector deals have been made with a Russian oil firm, as it rushes to ensure supplies do not dry up. – Reuters