Iran’s Islamist rulers, who sparked deadly domestic unrest by raising gas prices in November, say their controversial move also has failed to ease fuel smuggling into neighboring countries such as Pakistan, largely because smugglers have shifted to diesel fuel from gasoline.
Iranian authorities tripled the unsubsidized price of gasoline Nov. 15 from 7 to 21 cents per liter, based on Iran’s latest unofficial rial/dollar exchange rate of 139,700 published by Bonbast.com.
The gas price hike, imposed as Iran’s finances worsened under U.S. sanctions, triggered days of nationwide street protests that authorities crushed in a violent crackdown, killing at least 1,500 people, according to U.S. officials. Iran has called that figure exaggerated without disclosing its own death toll.
Gas prices in Iran, a major global oil producer, have long been among the lowest in the world, a phenomenon that has spurred decades of smuggling of Iranian fuel into such neighboring countries as Pakistan and Afghanistan, where legally sold fuel has been relatively expensive. Iran’s government has publicly opposed such smuggling, which robs it of revenue from legal fuel exports.
The Iranian state news agency that the November gas price hike had “raised hopes” for a reduction in fuel smuggling across Iran’s porous borders. However, the article quoted Majid Mohebbi, an anti-smuggling official in southeastern Iran’s Sistan and Baluchistan province, as saying the amount of Iranian fuel being smuggled into neighboring Pakistan and Afghanistan had remained as high as it had been before the gas price hike.
The IRNA article did not cite any estimate for the amount of Iranian fuel being smuggled out of the province, but another provincial economic official, Alireza Noura, previously estimated that , according to a November 2018 report by Iranian news site Entekhab.
Iranian officials said the continued high levels of fuel smuggling stem from a switch in what is being smuggled.
Iranian lawmaker Ali Bakhtiar, spokesman for a parliamentary energy committee, told the parliament’s ICANA news site this month that there had been a . With the price of the latter fuel type remaining low at 2 cents per liter, Bakhtiar noted that diesel was now one-tenth the price of unsubsidized gas and comprised 80% of all fuel being smuggled out of Iran.
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Before the November gas price hike, more gasoline was being smuggled out of Iran than diesel, according to Mehdi Aboui, a former deputy head of an intergovernmental task force on smuggling prevention. In September, the as saying 30 million to 35 million liters of gasoline were being smuggled across Iran’s borders per day, compared to 15 million to 20 million liters of diesel.
Iranian smugglers also appeared to confirm a post-November shift to cross-border smuggling of diesel, in interviews reported by and in December. The shift to smuggling of Iranian diesel also has been noted in Pakistan’s impoverished western Baluchistan province, which borders Iran.
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In a phone interview with VOA Deewa, a Baluchistan-based executive for the state-owned Pakistan State Oil company said diesel has become the most smuggled fuel coming from Iran, with widespread smuggling networks delivering it to provinces across Pakistan.
The diesel smuggled from Iran, where it costs 2 cents per liter, is much cheaper than the diesel sold by Pakistan’s PSO and other licensed energy companies, which . Diesel is used to fuel Pakistani buses, trucks and other heavy vehicles as well as agricultural equipment and deep-well turbines used to pump groundwater to the surface.
Gasoline sold by licensed companies in Pakistan also is more expensive than in Iran, at 76 cents per liter versus 21 cents per liter, although the difference is less than it was before Iran’s November gas price hike. A year ago, licensed gasoline sold for 85 cents per liter in Pakistan versus 7 cents per liter in Iran, according to a February 2019 report by .
In Pakistan’s Baluchistan, smuggled Iranian fuel is widely sold at so-called mini petrol pumps along highways and crowded city streets. Bayazid Khan, the owner of one such pump in the town of Kuchlak, told VOA Deewa that smuggled Iranian diesel typically sells for around 51 cents per liter, while smuggled Iranian gasoline sells for 65 to 70 cents per liter. The prices for both smuggled fuel types are cheaper than the prices for their Pakistani-licensed equivalents, but the discount for smuggled diesel is substantially greater.