Western sanctions on Iran have led to an increasingly lucrative black market trade in Iranian diesel fuel across the Iran-Pakistan border, according to a recent Reuters report.
Diesel smuggling has a long history in Baluchistan, Pakistan’s southwestern province, and the stranglehold placed on Iran’s exports by the United States and its allies have helped the trade flourish. Sanctions led to a sharp drop in the value of the Iranian rial in September, when it lost 40 percent of its value against the dollar, according to Reuters. The currency devaluation meant that the illicit trade in diesel was even more profitable for Pakistani smugglers. The price for a gallon of diesel is less than for a gallon of mineral water, and smuggled gas sells for less than legally obtained fuel in Pakistan. As a result, smugglers find a thirsty market for their goods.
Some smugglers bring Iranian diesel into Pakistan by foot, carrying soda bottles, while the more enterprising among the traders have opted for pick-up trucks to maximize their returns. The illicit diesel trade has even enticed one-time opium smugglers to change their line of work. "Why smuggle opium when you can earn as much money by smuggling diesel? It's much safer," a former drug trafficker turned diesel smuggler told Reuters.
Reliable estimates on the volume of the trade are impossible to make, but traders told Reuters that upwarover 1.3 million gallons of Iranian diesel is filled into Baluchistani tankers daily. The diesel is then shipped across Pakistan and sold to consumers throughout the energy-starved nation.
Responsibility for law enforcement in Baluchistan falls largely on the paramilitary Frontier Corps. The report points to their complicity in the illegal trade. "The Frontier Corps, coast guards and police provide the smugglers with protection in return for their share," a senior government official in Baluchistan told Reuters.
Officially, the Frontier Corps has denied all claims of involvement in smuggling. Authorities say they lack adequate “forces, proper weapons and equipment to stop the smuggling,” a customs official told Reuters. With sanctions on Iran unlikely to end soon, and the rule of law unlikely to be enforced in Baluchistan, the illegal Iranian diesel trade will thrive.