Bolstered by a steep decline in the value of rial, gasoline and diesel smuggling business has shot up by 50% in underdeveloped Sistan-Baluchestan Province.
Close to 20 million liters of gasoline and diesel is smuggled daily from the southeast province, IRNA reported.
"Long lines at the pumps are frustrating," a resident in of the deprived province told the news agency, adding that most residents buy fuel from the black market because they cannot spend a minimum of three hours at a gas station for 10 liters of gasoline.
Iran’s border areas – home to ethnic minorities – are underprivileged. It is reported that national youth unemployment, which officially is 30% – is believed to be much higher in border areas forcing many to resort to contraband to make ends meet.
Data from the Anti-Smuggling Organization show that compared to last year fuel smuggling has risen by 50% in border regions, namely to Pakistan and Afghanistan where the fuel sells for much higher prices and so the trafficking temptation is high.
Some sources have said that due to lack of proper controls and monitoring systems, a substantial portion of the contraband crosses the porous borders “before the tankers reach the pumps.”
Price Gaps
The state news agency noted that the illegal trade in taking fuel out of the country is booming due to the noticeable price disparity.
Diesel is priced at 3,000 rials (2 cents) a liter but smugglers sell it for 40 times more in Pakistan and Afghanistan where it has buyers at 80 cents/liter.
Gasoline in the two countries is sold at almost the same price, but is priced 7 cents in Iran, which means by transferring one liter of fuel smugglers rake in 1000% profit.
In an attempt to curb the illicit trade that experts say has become more lucrative than drug trafficking, the government is pushing for scrapping smart fuel cards.
The distribution of gasoline with fuel cards started in 2007 with the aim of achieving three main goals: curbing consumption, adjusting prices and cutting down fuel smuggling.
Although the rationing system ended in 2015, in Sistan-Baluchestan, unlike other provinces, fuel in still rationed and people must have their own fuel cards to be able to buy gasoline and diesel at pumps.
It is reported that 140,000 fuel cards were scrapped in Sistan in the last two weeks. Nonetheless, thousands of cards from other provinces are being traded in the border regions.
IRNA quoted the National Iranian Oil Products Distribution Company as saying that the government seeks to confront gasoline smuggling by creating stricter rules on use of fuel cards that are currently being bought and sold illegally.
The economic recession has led card owners to sell their cards to smugglers and then file for a duplicate.
"Given the capacity of the fuel card system there is no possibility that a person can use two cards simultaneously", the NIOPDC statement added.
Due to low fuel prices, some apply for replacement of cards to use it alongside the original fuel card to purchase more gasoline and sell it to smugglers.
