Over $1bn of Iran fuel smuggled into Pakistan every year, report reveals

Iranian smugglers have illegally transported over $1 billion worth of fuel into Pakistan through the two countries’ porous and unstable border on an annual basis, a new report has revealed.

According to the outlet, Nikkei Asia, it obtained a copy of a 44-page investigation – titled ‘Smuggling of Iranian Oil’ – conducted by Pakistani intelligence agencies and leaked to local media, which showed that around $1.02 billion worth of petrol and diesel from Iran had been smuggled across the 900-kilometre-long border into Pakistan last year.

With that amount being around 14 percent of Pakistan’s annual consumption of fuel, it reportedly resulted in losses to the country’s exchequer of about $820 million, most of which was reported to likely be the lost tax and duties, as well as damage to the businesses of petroleum product suppliers in Pakistan.

READ: The US continues to use sanctions against developing nations for having the ‘wrong’ kind of relations

As part of that illegal trade, around 2,000 vehicles transport the fuel through the smuggling route on a daily basis, providing a thriving industry and economic opportunities in the deprived province of Balochistan along the shared border.

That is apparently one of the key reasons why the Pakistani government is finding it difficult – as well as inconvenient – to properly crack down on the smuggling operations, with the report stating that “Almost 2.4 million people in Balochistan depend on this oil trade for their livelihood and otherwise have scarce economic opportunities”.

If the illicit trade were to be entirely disrupted, the fear is that it could potentially backfire by incentivising impoverished Balochis to turn to crime, the drug trade, and the Balochi separatist militant movement currently plaguing those border areas.

According to one 32-year-old Balochistan resident named Abdullah Baloch, quoted by the outlet, “If oil smuggling from Iran is shut down, then people in districts bordering Balochistan will have nothing to eat.”