Oil deals: The expected hit to smugglers

Most of Balochistan has no fuel pumps, relies on illicit oil flow from Iran

QUETTA:

With the dismantling of most sanctions on Iran, the Pakistan-Iran Joint Border Commission, in its 19th meeting in Quetta, vowed that it would now give legal cover to all trade between the two neighbours.

The decision may give a welcome boost to Pakistan’s economy that is expected to save at least Rs10 billion annually due to decrease in oil smuggling.

Talking to The Express Tribune, Balochistan Customs Collector Saeed Khan Jadoon said diesel was being smuggled through the Makran division, especially the Panjgur, Kech and Gwadar routes. “We run short of manpower, so we can’t effectively control smuggling,” he said.



Customs officials have seized around 2.815 million litres of oil from different part of Balochistan in the last nine months and saved Rs179.03 million in revenue losses.

They have also confiscated Rs300.98 million worth of smuggled goods and recovered around Rs86.57 million in fines and penalties.

“We don’t have fuel stations in the entire Balochistan except for Quetta and therefore, illegal and unregistered filling stations have sprung up there.”

More than 95% of the population living in border areas depends on this business and now the border commission will make attempts to legalise it. Local people will have to take permission from the regulator to legally operate the filling stations.

If oil trade is legalised, according to Jadoon, cost for the area people will be 20% lower compared to other parts of the country. The commission has decided to establish more trading points in Gapt and Mand areas for legal trade and the Federal Investigation Agency will soon establish its offices there.

“Smuggling of diesel in Balochistan is inflicting an annual loss of around Rs10 billion to the national economy or even more as figures are unknown,” Jadoon said.

Smuggling routes

Three districts of Makran division – Gwadar, Kech and Panjgur – have been known for Iranian fuel smuggling for the past three decades.

“Around 95% of people in the Makran division bank on oil and other goods smuggled from Iran for their livelihood,” a resident of Gwadar said, adding more than 30,000 families depended on the illegal oil trade.

Oil, cement, food items, carpets and commodities come regularly from Iran. “Traders pay customs duty on cement but on oil and other goods they do not pay anything,” said a local trader.

In Makran, goods are traded in Pakistani rupee and in return wheat and livestock are sold to Iranian traders. Gwadar sea route is also being used for the illegal oil trade.

Mohammad Khalifa, a transporter who supplies Iranian petrol from Gwadar to Karachi, said people in Jiwani, Pasni and Gwadar brought Iranian petrol and diesel illegally to Gwadar and then shipped the oil to Karachi.

“It is illegal but we do not have other avenues to survive,” he said. “Gwadar port is not completely functional yet, we do not have jobs, neither we have a good irrigation system nor factories.”

According to him, around 20,000 litres of petrol and diesel are smuggled every day to Hub, a town in Lasbela district that shares border with Karachi.

Mohammad Fazal, a truck owner, alleged that oil tanker drivers paid hefty sums in bribe to the Pakistan Customs, Coast Guard and other security agencies to cross the check posts.

“Some customs officers and other law enforcers are directly involved, they confiscate our trucks for weeks, if their share (bribe) is not paid,” he said.

He said they took in the range of Rs2,500 to Rs5,000 from a large oil tanker to cross a check post and charged Rs1 million after a tanker was seized by high officials during a rare strict search. It is later set free

Some of the security officials said petroleum marketing companies were also involved in the smuggling of Iranian oil as this way they saved taxes and duties.

Published in The Express Tribune, February 15^th,  2016.

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