Representative image of fuel.
Credit: PTI File Photo.
The caretaker government in Pakistan's Balochistan province has shut down around 500 petrol pumps illegally supplying cheap Iranian fuel to the people, adversely impacting local refineries amid the weakening economy and high inflation in the cash-strapped nation.
Iranian fuel is considerably cheaper compared to the fuel products supplied by Pakistani refineries.
Balochistan's caretaker Information Minister Jan Achakzai told the media that these pumps were selling smuggled Iranian petrol and diesel to the people.
“A nationwide crackdown is being carried out on the supply of Iranian fuel products in the country,” he said.
The crackdown comes as Pakistan's caretaker government announced yet another hike in the prices of petrol and diesel, taking them to a historic high – over Rs 330 per litre – amidst double-digit inflation in the cash-strapped country.
The hike in prices was dictated to by the International Monetary Fund (IMF) which bailed out Pakistan’s weak economy this year with a support package of $ 3 billion.
Iranian fuel, however, is sold illegally in the country at approximately 220-230 rupees per litre.
Smugglers move the Iranian fuel in containers via the land border crossings in Balochistan with Iran and the fuel then travels to other big cities like Karachi and parts of the Southern Sindh province.
Iranian fuel products are mainly sold openly in the Balochistan province due to its proximity to Iran.
A source in the refinery industry said that the smuggled Iranian fuel into Pakistan was adversely impacting the sale of local refinery fuel products and in the weakening economy and high inflation they couldn’t bear these drop in volumes.
The source said that bringing in Iranian fuel was a win-win situation because it is sold for as little as 20-30 rupees per litre in Iran, which is an oil-producing country.
Officially, the government has placed a ban on importing Iranian fuel products since 2013 because of economic sanctions placed on Iran by the United States over its nuclear programme.
However, the government machinery turns a blind eye to smuggling across land borders because of the huge profits earned by involved parties.
Achakzai said that the private dealers engaged in selling Iranian fuel in Balochistan had kept around a million dollars at a safe house in Quetta which has now been seized by the authorities.
The increase in petroleum prices came on the heels of a 27.4 increase in the rate of inflation in August-September.
Sources say that the business of smuggling Iranian fuel into Pakistan and the rising dollar rate is threatening to shut down some Pakistani refineries.
Achakzai said that they were working closely with the Sindh government to stop the smuggling and sale of Iranian fuel products in the two provinces.