Head of Anti-Smuggling Operations: Over One Billion Liters of Fuel Smuggled from Iran in Less Than Three Months

Ali Moidi, the head of the Anti-Smuggling Headquarters of Goods and Currency in Iran, announced on Wednesday, October 10, that "over one billion liters of fuel have been smuggled from Iran in the past two to three months." He attributed this level of fuel smuggling from Iran to neighboring countries to the "price difference of fuel within the country and neighboring countries," which he stated has "wasted part of the people's capital and continues to do so." The head of the Anti-Smuggling Headquarters described fuel smuggling from Iran as "organized smuggling," stating, "There is no doubt about the organization of fuel smuggling, to the extent that this organization is linked to some of our administrative and governmental structures." Possible revival of fuel cards and reallocation of this commodity, implementing a plan to supply fuel to the transportation fleet based on mileage, and controlling fuel supply for agricultural machinery are among the plans to control part of the fuel smuggling from Iran to outside the borders, which have been intermittently heard in the comments of officials and decision-makers in Iran in recent days and weeks. However, Mr. Moidi considers the main solution to stop fuel smuggling from Iran to be reforming fuel prices. According to the head of the Anti-Smuggling Headquarters, "If a balance is created between fuel prices inside and outside the country, the thirst for fuel smuggling will be minimized." He added, "The price difference is such that it encourages any foreign citizen in neighboring countries to continue smuggling fuel with the help of opportunistic individuals inside the country." Masoud Pezeshkian, the Deputy Speaker of the Islamic Consultative Assembly, recently stated, "Smuggling gasoline to neighboring countries has ten times the profit for smugglers, and the fuel card is a tool for managing consumption and preventing fuel smuggling." Mahmoud Vaezi, the head of Hassan Rouhani's office, also confirmed that the revival of the fuel card would be "the first step for more oversight and combating fuel smuggling." According to unconfirmed reports published in recent weeks, various plans are being considered in the government and parliament for the return of the fuel card to circulation and even dual pricing of gasoline, although the Ministry of Oil fundamentally opposes dual pricing for gasoline and diesel, considering it a source of corruption. In July 2007, based on that year's budget law, fuel rationing in Iran was implemented using fuel cards, and the supply of gasoline and diesel to vehicles, including public transport fleets, government and private cars, and motorcycles, was applied solely using smart fuel cards. Each card was allocated a specific monthly quota of fuel at the government price, and refueling beyond that quota was possible at free market rates. However, in 2015, with the unification of fuel prices, the discussion of using fuel cards was also eliminated. For years, gradual reform of fuel prices in Iran aimed at realizing fuel prices has been implemented with many ups and downs, but any price reform and increase in fuel rates, after a period of stability, loses its effect due to the increase in currency prices and new parity, making fuel smuggling outside Iran economically justifiable. At the same time, the increase in fuel prices, because it leads to rising production costs of goods and services and ultimately increases inflation rates, faces serious opposition, and decision-makers, considering political and social considerations, are not very interested in realizing fuel prices and fluctuating them according to regional rates. Currently, based on the current value parity of the dollar in the free currency market of Iran, Iran has one of the cheapest fuel prices in the world, which is considered the main reason for fuel smuggling from Iran to outside its borders. The surge in currency prices in recent months has deepened the price difference of fuel in Iran and neighboring countries, creating a price difference for essential goods subject to subsidized currency in Iran and outside its borders, which has also strengthened the smuggling of essential goods outside Iran's borders. Although, according to Ali Moidi, the head of the Anti-Smuggling Headquarters, the smuggling of essential goods has been somewhat contained.