Pakistan did not import any high-speed diesel (HSD) in July, as domestic demand is largely met from the commodity smuggled from Iran.

According to diesel dealers in Baluchistan, 40,000 liters/day diesel is smuggled from Iran, while 12,000 vehicles are used in smuggling of fuel exclusively.

Sources said local smugglers used to buy diesel from Iran and Pakistani rupee, hence there was no pressure on the foreign exchange reserves. However, the smuggling also deprived national exchequer of significant amount of revenue. investigation found that diesel costs PKR18/liter in Iran, and Pakistani smugglers buy the commodity for PKR25/liter. If bribes are not paid to check posts, security posts and mobile squads, the fuel reaches Quetta at PKR 80/liter. But, the commodity is sold to the people of Baluchistan at PKR 250/liter.

Although, the government doesn’t get any revenue, this illegal trade primarily benefits the mafia including security posts, check posts and mobile squads.

Founding Chairman of All Pakistan Dry Fruit Importers and Exporters Association, Haji Fojan, said there had been only a slight decline in demand for diesel in the country.

He said government should legalize diesel import from Iran by imposing and collecting duty and taxes. This way, government would get its revenue, people will get cheaper fuel and corruption of civil and security bureaucracy will be minimized.

Haji Fojan said trade with Iran was in PKR or on barter; while Iran is also a trading route of Central Asia and Turkey. However, Customs and other security and enforcement agencies were making it difficult for the legitimate traders.

He said white spirit was imported from Iran in 3,000 tankers every day, and the Customs always conducted laboratory tests of the white spirit which caused delays. He said thousands of samples were tested and nothing wrong was ever find, and still authorities were troubling the traders.

Haji fojan also criticized the formation of Collectorate of Customs of Taftan saying it would increase in regulatory hurdles for the traders. He said the policy makers were not devising the right policy for trade, instead they were promoting smuggling.

Officials said that diesel smuggling from Iran mostly met the demand for HSD in the country in the month under review, as the high price of Pakistani diesel pushed the transport sector to cheap Iranian diesel.

The government increased the price of HSD by 7 percent to Rs293.40 per liter on August 15, while Iranian diesel is sold at around Rs200 per liter in the border areas.