In a bid to alleviate the strain on Pakistan’s persistently dwindling foreign exchange reserves and harness potential revenue streams, the Ministry of Petroleum has called for a pivotal meeting to discuss the feasibility of legitimizing fuel imports from Iran. The deliberations also include the contemplation of importing crude oil from the neighboring nation.
Presently, Pakistan is grappling with the challenge of consuming a staggering 60 million liters of diesel daily, out of which an estimated 10 million liters are surreptitiously smuggled across the border from Iran, as revealed by a comprehensive study undertaken by Customs authorities.
The intensified smuggling activity has attracted the attention of authorities, leading Chief Collectors of Baluchistan, Abdul Qadir Memon and Muhammad Saleem, to take aggressive measures in curbing these illicit operations. Under their direction, Collector Customs Quetta Irfan ur Rehman and Additional Collector Umar Shafique have bolstered controls on major roads and highways, effectively disrupting the movement of smuggled goods.
Interestingly, this crackdown has exposed that the smugglers have shifted their operations to the ‘Kacha’ areas, which fall under tribal territories. In exchange for their assistance in transporting fuel, these tribes reportedly receive tributes or gratification from the smugglers.
The scale of this smuggling operation has been brought to light, with six main smuggling routes identified: Newpaji to Chaghi (300 vehicles), Jaudar to Washuk (400 vehicles), Jeerak to Panjgur (550 vehicles), Paragh to Panjgur (300 vehicles), Jaldai to Panjgur (100 vehicles), and Abdoi to Turbat (700 vehicles). Together, these routes facilitate the smuggling of an astonishing 7.5 million liters of fuel daily. Notably, an additional 2.6 million liters are smuggled each day via Kundani to Gwadar through the utilization of approximately 3,500 wooden boats.
Reports have emerged detailing the intricate methods employed by smugglers, who operate in convoy formations shielded by heavily armed tribals utilizing vehicles like the Toyota Vigo. Unfortunately, Customs faces resource limitations that make it challenging to confront these groups with superior firepower. With only 700 personnel responsible for monitoring the extensive jurisdiction of Customs Quetta, which stretches along the borders of Iran and Afghanistan, the agency is hard-pressed to enforce its authority effectively.
It’s been noted that Customs lacks support from quick response squads belonging to security and other law enforcement agencies, underscoring the complex nature of the issue at hand.
District governments have historically allocated quotas for fuel imports from Iran for Baluchistan, yet these quotas are consistently violated and surpassed. However, the business community in the province emphasizes that instead of halting the influx of fuel products from Iran, it should be regularized. These imports are typically purchased using local currency or exchanged through barter arrangements.
With Pakistan grappling with surging inflation, record-high fuel and energy prices, and a weakening currency, the proposition of formalizing imports and exports with neighboring countries in local currency is gaining traction as a potential strategy to mitigate the economic challenges.
As the Ministry of Petroleum convenes to assess the potential of officially regularizing fuel imports from Iran, Pakistan stands at a crossroads, faced with the opportunity to both bolster its revenue streams and relieve the mounting pressure on its foreign exchange reserves. The outcome of these deliberations could hold the key to steering the nation’s economy toward stability in these challenging times.