Iranian petroleum products: Illegal cross-border trade causing Rs 60 billion losses to exchequer p.a.

The federal government has been facing revenue leakage of around Rs 60 billion annually from illegal cross-border trading of petroleum products at Pak-Iran border, which is increasing due to the US sanctions on Iran and exorbitant petroleum prices in the country.
The Senate Standing Committee on Petroleum was informed on Tuesday that total sale of diesel has been declined by 1.4 million tonnes in last 10 months of current fiscal year due to increasing smuggling of petroleum items from Iran to Pakistan.
On the daily basis more than 150 bowsers (tankers), trucks and other vehicles carry smuggled petroleum products from Pak-Iran border in Balochistan and supply fuel to entire country, as customs posts supported by Frontier Corps (FC) are running short of staff.
However, the senators hailing from Balochistan supported the illegal smuggling of POL products at the Pak-Iran border. The managing director of Pakistan State Oil (PSO) informed the parliamentary panel that PSO has been facing sale decline of 450,000 litres diesels, worth Rs 18.5 billion, which is 32 percent of total smuggled POL products in the country in last 10 months.
PSO Quetta business manager Umar Shafi said smuggled diesel increased by 62 percent and smuggled MS increased by 43 percent in Quetta. "We (PSO) have to shut down 159 petrol outlets in Balochistan where Iranian petrol is freely available at fuel stations and it is cheaper by Rs 10 to Rs 20 per litre," he added.
FC Inspector General Brig Rizwan informed the committee that in southern Balochistan, there is not a single petrol outlet of any oil marketing company; therefore, transporters' reliance is increasing on smuggled Iranian petrol. Smuggling of POL products is so lucrative business that the natives are not ready to take labour work at cheaper rates. The livelihood trend on smuggling is increasing day by day because of unskilled labour, non-availability of industries and underdeveloped area, the IG FC added.
He said seven wings of FC are operative in Southern Balochistan which are insufficient to curb the smuggling from Iran. "We proposed at least 15 wings but recently the federal government agreed to provide five more wings in the area," he said. After paying 10 to 15 percent taxes, smuggled petroleum products are transported legally to across the country, he added.
Committee Member Shammim Afridi said he used to smuggle petrol from Iranian side once. He recalled that the provincial government allowed diesel and petrol from Iran in 2003-04 for one-and-a-half-year. But cross-border traders had to deposit tax on ex-depot price of POL at Karachi. "I also traded 150 trucks of smuggled oil from Iran," he added.
The collector customs informed the committee, "Everything which is illegal in Customs Act is legal in Balochistan." He said native don't feel smuggling a crime and the customs department does not have enough force to keep a proper check on smuggling. "We proposed a border task force long time ago but the federal government is yet to take any action on the proposal," he said.
In his recommendations, the committee headed by Mohsin Aziz recommended to discourage the free float of bowsers and trucks carrying smuggled diesel and petrol. The committee did not give any recommendations regarding small scale cross-border smuggling.