Fuel Smuggling on Rise

Fuel Smuggling on Rise
Iran daily: Tue, Dec 14, 2004

The US military assault on Iraq has encouraged fuel smuggling from Iran's western borders into the war-ravaged country.

Previously, fuel was smuggled via almost all eastern, northeastern and southeastern borders, whereas the western parts of Iran saw the illicit business for the first time only after the US-led forces occupied Iraq, the Persian daily Jahan Eqtesad reported.

At present, fuel prices in Iran are amongst the lowest in the world. The government each year pays a huge amount of money in fuel subsidies. Fuel smuggling harms national interests as it leads to a waste of the subsidies.

Experts are of the opinion that once state subsidies are systematized-that is, the well-to-do sections of the society would no longer enjoy subsidies and, instead, lower social ranks would get a bigger share-fuel smuggling would decline to a great extent.
Targeted subsidies could effectively help discourage smuggling of fuel from the country, as it would make the now lucrative business risky and uneconomical.

The huge difference in fuel prices in Iran and in regional countries has made smuggling even more profitable to the extent that smugglers continue their illegal business despite the heavy penalties.

The most commonly smuggled items are gasoline and flour due to their incredibly low prices in Iran.

Poverty and unemployment in border areas also play a major role in the rise in smuggling of goods to and from the country. Many people in border areas earn their livelihood in this way.

Neighbors Needs

At present, unofficial statistics suggest some five million liters of energy carriers is smuggled to Afghanistan and Pakistan on a daily basis.

Some say a considerable portion of Afghanistan's need for fuel as well as 20 percent of that of Pakistan is supplied through smuggled Iranian fuel.

Some experts contend that an increase in fuel prices could help resolve the problem. The government had envisaged an annual growth in fuel prices in the course of the fourth development plan (2005-2010), whereas many parliamentarians have opposed this initiative for what they say is its destructive impact on prices of other goods and services.

According to official figures, some two million liters of diesel and one million liters of petrol are smuggled out of the country via eastern borders.

Fuel smuggled from Iran is mainly transported from eastern border areas to Nimrouz province in Afghanistan and thereon to Kabul. The central government in the war-ravaged country is seemingly unwilling to help prevent the illegal import of fuel from Iran into its territories.

On the other hand, some 265,000 tons of gasoline and 437,000 tons of diesel are smuggled to Baluchestan and Sarhad provinces in Pakistan each day.

European analysts have informed Islamabad that smuggled gasoline from Iran accounts for 18 percent of Pakistan's annual petrol supply.

Iran's Customs Administration officials believe that oil products constitute 90 percent of goods smuggled from Iran. The products include petrol, diesel, motor oil, kerosene, etc….

Social Justice

Needless to say, the government uses public funds to allocate fuel subsidies and import gasoline from abroad.

That is, the financial interests of some 75 percent of people who do not own vehicles are sacrificed at the altar of the rich.

Mohammad Hassan ghadiri Abyaneh, a strategic management expert, is of the opinion that the wealthy sections of the society take 40 percent more fuel subsidies than the lower social ranks.

He also believes the increase in fuel prices should aim at bringing about greater social welfare.

"This year, gasoline imports would total $8.2 billion, which is nearly 30 times the budget the Presidential Office has allocated for deprived areas.

He said the government is presently allocating billions of rials per day for gasoline subsidies-what he says could be spent advancing efforts to improve the national development goals.

The expert further noted that once logical prices are set for oil products, smuggling of fuel will go down to a minimum.

"At present, for many criminals, drug trafficking is less profitable than fuel smuggling," he said, adding that Iranian fuel is also smuggled to Saudi Arabia, Kuwait, United Arab Emirates and other oil-rich Persian Gulf countries.

This, he said, means that the regional countries consume fuel that Iranian people are paying for

Dr. Ghadiri Abyaneh
http://www.ghadiri.org/archives/000251.html