The Pakistan Petroleum Dealers Association (PPDA) has raised concerns over the increasing smuggling of Iranian fuel into Pakistan, stating that up to 35% of diesel sold is illegally imported from Iran.
Per the PPDA, fuel smuggling, previously limited to Balochistan, has now spread throughout Pakistan.
In April, the Ministry of Energy requested that security forces crack down on Iranian fuel smuggling.
An official memo revealed diesel sales had plunged “more than 40%” due to the contraband products. Pakistan primarily relies on the Middle East for fuel supplies, but smuggling continues along its western border with Iran.
Pakistan is currently grappling with a severe balance of payment crisis. It has taken measures, such as increasing fuel prices, to secure a $1.1 billion aid package from the International Monetary Fund. Fuel prices have nearly doubled over the past 12 months, while inflation has reached a record high of 36.4% in April.
Sales of Pakistan’s oil products have decreased by 46% to 8.8 million barrels in April compared to last year, with diesel sales down 50%. This does not include smuggled fuel. Iranian fuel is reportedly 53 rupees cheaper per liter than the official retail price, which allows private dealers to profit by selling it at a lower price than local dealers.
The PPDA claims that the smuggling of Iranian fuel is causing further damage to the already struggling industry in Pakistan.
