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Unification of Gasoline Prices Reduces Smuggling

Unification of Gasoline Prices Reduces Smuggling Unification of Gasoline Prices Reduces Smuggling

Gasoline smuggling has declined significantly over the past few months, executive director of National Iranian Oil Refining and Distribution Company said, noting that diesel smuggling is still pervasive.

"Since gasoline prices were unified, average consumption in border areas has been lower than the country's total average," Seyyed Nasser Sajjadi was quoted as saying by Shana on Saturday.

"The trend shows there is little interest in gasoline smuggling" after the introduction of a single price last year.

The government announced in late May it would no longer allocate subsidized gasoline, among other types of fuel, to passenger vehicles at a rate of 7000 rials and offered regular gasoline at a single price of 10,000 rials (around 27 cents) without a quota for car owners nationwide.

The fall in illicit import of gasoline comes as Iran has imported nearly 3 billion liters of gasoline since March 2015, around 1 billion liters more than the same period of last year.

"The official lifting of sanctions in January will spur economic growth and that will lead to higher demand for gasoline," Sajjadi said.

He added that the government is now allocating diesel to car owners based on their mileage as part of efforts to curb fuel smuggling.

Since the new initiative took effect in September, diesel smuggling has decreased by 15%, or nearly 8 million liters a day.

Fuel smuggling has for years plagued Iran's eastern areas, where the country has borders with Pakistan and Afghanistan, two war-ravaged neighbors with crippled economies on the back of years of civil war and foreign intervention.

Many Pakistani and Afghan citizens live on the trafficking of fuel, goods and drug for lack of a better occupation.

Smuggling in 2013 was estimated at $25 billion, of which $7.2 billion pertained to fuel—the main commodity smuggled out of Iran. Fuels account for more than 90% of goods smuggled from Iran.

The Islamic Republic is also ramping up measures to counter the import of low-quality gasoline.

In December, a gasoline tanker from Turkmenistan was denied entry to Iran due to “low quality of Turkmen gasoline” amid reports that a purported Arab dealer was using a popular messaging app to sell gasoline.

 

Financialtribune.com