Close to 1.5 billion liters of diesel are smuggled to neighboring countries by thermal power stations per year, spokesman for the Majlis Energy Commission said.
"Given the fact that each liter of diesel can be sold 50 times higher in Iran’s border regions, the illicit fuel trafficking by power plants can generate up to $1.5 billion for them per annum,” Malek Shariati-Niasar was also quoted as saying by Barq News website.
According to the spokesman, official data issued by supervisory bodies indicate that some power stations send the Oil Ministry tankers to border areas instead of emptying them in power plants’ storage tanks and this helps them smuggle about 4 million liters of diesel per day.
“If the illegal practice is not halted, the energy sector will suffer from irreversible consequences. Supervisory bodies, which are seemingly unable to do anything, have asked Majlis Energy Commission to put an end to the ongoing catastrophe,” he said.
There are about 130 thermal power plants in Iran, which receive around 10 billion liters of diesel annually. These power plants, as the subsidiaries of Energy Ministry, do not pay any money to the Oil Ministry for the fuel.
Power stations use diesel as an alternative feedstock when natural gas delivery to them is cut, especially in the cold season when households’ consumption peaks.
Among neighbors, Turkey, Iraq, Pakistan and Afghanistan are common destinations for the smuggled diesel.
“Gasoline smuggling can be traced, as it is supplied with smart fuel cards. However, there is no such system for selling diesel and it is not clear how many liters of the fuel are sent across the borders every day,” Shariati-Niasar said.
Cheapest Diesel
Iran has the world's cheapest diesel (2 cents per liter).
The average international price for the same fuel is about $1.2.
Domestic fuel prices are influenced by global prices, refining and distribution costs, demand, availability of resources and taxes.
Fuel prices are high in developed countries and 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 paltry revenues from selling fuel domestically, but they also spend billions on fuel subsidies.
Daily diesel consumption in Iran is around 80 million liters.
Drawing a parallel between the amount of fuel sold illegally by power plants and what is smuggled by vans and buses (by bribing border patrols and falsifying technical inspection papers), Shariati-Niasar noted that the former is much more sizable and done more systematically.
Close to 80% of power plants in Iran are owned by the private sector banks and organizations like Setad Foundation (Headquarters for Executing the Decree of Imam Khomeini on helping the underprivileged), the Islamic Revolution Mostazafan Foundation, Khatam al-Anbiya Construction Headquarters, an Iranian engineering company affiliated to the Iranian Revolutionary Guards Corps, Armed Forces Social Security Organization and Bank Pasargad.
Contrary to the claims of the Majlis Energy Commission, some energy experts and power plant owners insist that it is impossible to smuggle diesel from power stations as the Oil Ministry tankers are tracked regularly. Nonetheless, the Energy Ministry has reported several cases of fuel smuggling over the last decade.
The government’s protestations over fuel smuggling from the eastern and southern borders have become a permanent feature. This is matched by the inability and unwillingness of those in charge to put an end to this wholesale corruption that has been inflicting colossal economic losses for too many years.
Border Regions
Reports by the National Iranian Oil Products Distribution Company show that at least 10 million liters of fuel (gasoline and diesel) are illegally sold in the border regions, namely in Sistan-Baluchestan Province.
But the key question that has remained unanswered is why officials do not take any concrete actions to tackle the issue. Are they really unable to take on the smugglers, or not interested in stopping them?
If regular claims carry weight to the effect that poor border dwellers are involved in the contraband business, then one may ask why do they continue to live in poverty when the illegal trade brings huge profits?
There is no denying that border law enforcement forces can fight the smugglers, but many of the people likely to be killed will be ordinary citizens who are forced to conduct this illegal business simply because otherwise they cannot provide for their families.
Experts say that because the smuggling stems largely from mass unemployment and authorities cannot solve the problem in the short term, they look the other way and let the smugglers continue with their trade.
Now that the government is not interested in ending the multimillion-dollar business, nor can it create jobs, some wonder why the state does not take measures to help the poor border dwellers do the business legally.
