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  HOME | Oil, Mining & Energy (Click here for more)

Iran Faces the Scourge of Fuel Smuggling

TEHRAN – Iranian authorities have reinforced their fight against fuel smuggling which has become a scourge that takes advantage of subsidies and the devaluation of the national currency.

Most of the smuggled petrol is destined to neighboring countries in the east of Iran, such as Afghanistan and Pakistan, while in the south of the country, the coastal countries of the Persian Gulf consume Iranian diesel.

Iranian security forces have arrested several smugglers and two foreign oil tankers in the Persian Gulf in just over a month as part of an operation to curb this illegal activity.

Authorities in the country have also restarted the use of the so-called “smart petrol card” to ration local consumption so that petrol cannot be used for smuggling.

“The fuel leaves the country, which favors smugglers’ pockets instead of the Iranian State Treasury due to the difference in price with other countries,” Asadollah Qareh-Khani, member of the Iranian Parliament’s Energy Commission, told EFE.

One liter of petrol in Iran costs less than 10 cents and one liter of diesel about 3 cents due to government subsidies and the strong devaluation of Iranian currency after the United States had imposed sanctions.

When petrol prices began to depreciate in 2018, fuel smuggling levels rose by land and sea, although the figures are not clear.

About 5 million liters of petrol are smuggled every day in the country, according to the Iranian Ministry of Petroleum.

However, updated data from the official government’s website estimates that the smuggled quantity of petrol represents some 40 million liters per day.

A former smuggler from the southern city of Bandar Abas, in the Persian Gulf, explained to EFE how the illegal activity works in the area.

“An oil tank loaded with around 30,000 liters of diesel delivered it to foreign ships in international waters,” he said.

“Most of them sold it to Emirati customers.”

The fuel is usually transported in barrels to a closed port, but some smugglers have installed a pipe with a pump in a house on the coast.

The pipe leads to a point in the sea, where the boat can approach to load the fuel.

In recent months an increase in police controls has led to a significant reduction of smuggling, according to Qareh-Khani, who, however, explained that “there is still a lot.”

During the operation against fuel smuggling, Iranian authorities seized two oil tankers that operated in the Persian Gulf.

One of them, called MT Riah and flying the Panama flag, was seized on the Iranian island of Larak as it transported one million liters of smuggled fuel.

The second oil tanker, from Iraq, was seized at the beginning of August near Farsi Island in the Persian Gulf while transporting 700,000 liters of fuel.

 

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