Pakistan Oil Sellers Union: More Fuel is Smuggled from Iran

The Pakistan Oil Sellers Union announced that 35% of the diesel sold in the country is illegally imported from Iran. The union stated that previously, fuel smuggling was limited to the Balochistan province of Pakistan, but it has now spread to other parts of the country. Reuters has obtained an official note from April of this year, in which the Pakistani Ministry of Energy requested security forces to stop fuel smuggling from Iran to Pakistan. The note indicated that diesel sales in Pakistan have decreased by 'more than forty percent' due to the presence of smuggled products. Pakistan meets most of its fuel needs from Middle Eastern countries, but fuel smuggling from Iran is also prevalent. The country is currently facing a balance of payments crisis, with its foreign reserves barely sufficient for a month's imports. To address this, the Pakistani government has taken several measures, including increasing fuel prices, to pave the way for a $1.1 billion aid package from the International Monetary Fund. Last month, fuel prices increased by 143 rupees (just over 50 cents), nearly a 100% rise. Inflation has also reached its highest level at 36.4%, severely reducing people's purchasing power. According to a report from the Advisory Council of Oil Companies in Pakistan, the volume of petroleum product sales in April compared to last year has decreased by 46%, reaching 8.8 million barrels. Diesel sales have also shown a 50% decrease compared to last year. Iranian fuel is about 53 rupees cheaper per liter than the official retail price, allowing private traders to earn significant profits by selling cheaper Iranian fuel compared to local traders. The Ministry of Energy of Pakistan stated that according to the report from the country's Oil and Gas Regulatory Authority, approximately 10.2 billion rupees are lost daily due to the smuggling of about 4,000 tons of fuel from Iran. Abdul Samir Khan, the head of the Pakistan Oil Sellers Union, stated, 'The government allows the smuggling of Iranian oil because it is facing a shortage of foreign currency.' Given the significant price difference between Iranian fuel and domestic fuel, refineries are struggling to increase their reserves and are operating at only 50 to 70 percent of their capacity. Earlier this month, the Atak refinery announced to the Pakistan Stock Exchange that due to low sales, it would operate at only 25% of its capacity, citing 'multiple factors including the potential entry of smuggled goods in our product packages' as the reason for low sales. There has been a warning of a 'critical situation' regarding gasoline and diesel from Iranian officials. Iran's oil exports have reached 'the highest level in the past three years.' One hundred ships carrying smuggled Iranian oil lost their necessary certifications, and Iran has transferred seized oil tankers to 'south of Bandar Abbas.'