There has never been reliable data on the amount of fuel smuggled out of Iran to neighboring countries during the past few decades, but estimates put the number in the region of 10 million liters every day worth $666,000.
One main reason behind the fuel smuggling is the unprecedented hike in foreign exchange rates and the low price of gasoline in the country, IRNA reported.
Comparing fuel prices in Iran and neighboring countries shows that despite the high risks, smugglers dare to engage in the illicit and dangerous fuel trafficking because they see high and rising profit at the end.
For instance, a 20-liter container of gasoline costs $1.4 in Iran and can be sold for $23 on the Turkish side of the joint border.
Among neighbors, Turkey, Iraq, Pakistan and Afghanistan are common destinations where the smugglers conduct their trade.
Iran has the world's second-cheapest gasoline after Venezuela. While one liter of gasoline in Venezuela costs one cent, it is sold for 7 cents in Iran. The average international price for the same fuel is about $1.17.
Domestic fuel prices are influenced by global prices, refining and distribution costs, demand, availability of resources and taxes.
Fuel prices are the highest in developed countries, meaning that their governments make the most profit by taxing diesel and gasoline at the pumps. The opposite is true in Iran and other oil-rich countries such as Saudi Arabia and Venezuela. These countries not only earn zero revenues from selling fuel, they also spend billions on fuel subsidies.
The daily gasoline consumption in Iran is 90-100 million liters of which 10 million liters are smuggled.
Experience in the recent past has it that fuel cards and gasoline rationing system were effective in controlling and managing the high consumption rates.
In 2007, the government issued electronic fuel cards for all vehicles. In December 2010, as part of the first phase of the national subsidy reform plan, the government announced monthly gasoline quotas.
However, in 2015, the government stopped allocating subsidized gasoline to passenger vehicles and regular gasoline was offered at a single price of 7 cents for car owners without restriction.
Experts are again saying that gasoline prices need to be revised and that rationing system and fuel cards can help control the strange pattern of smuggling that has long made a mockery of rule of law and border patrol not say anything about the financial losses to the government treasury.
“So far no decision has been taken regarding raising fuel prices and reviving the rationing system,” a spokesperson for the Majlis Energy Commission said Saturday.
“But if gasoline consumption and smuggling continue on the present trajectory, then the government will have to take serious action,” Asadollah Qarekhani told ISNA.
