Official: Iran smuggles ‘5 to 6 million liters’ of oil into Pakistan daily

Islamabad — Pakistan's military revealed Monday that millions of liters of Iranian oil are being smuggled into the country each day, but rejected long-standing allegations that it is also playing a role in the illegal trade.

Lt. Gen. Ahmed Sharif Chaudhry, the army spokesperson, told a televised news conference that “consistent efforts” are being made to enhance security along the country's more than 900-kilometer border with Iran in order to restrict oil smuggling.

“If you look at the numbers, [the fuel smuggling] has come down from 15-16 million liters per day to 5-6 million liters per day, thanks to the combined efforts of the army, Frontier Corps [paramilitary force], law enforcement, and intelligence agencies,” Chaudhry stated.

He did not provide further details, but Chaudhry is the first Pakistani official to publicly share estimates regarding the ongoing large-scale illegal oil trade between the two countries.

A rare comprehensive investigative report on the long-running illicit trade, conducted by two Pakistani official spy agencies and leaked to local media last May, revealed that Iranian traders smuggle more than $1 billion worth of petrol and diesel into Pakistan annually.

The probe found that the illegal fuel supply accounted for about 14% of Pakistan’s yearly consumption, resulting in hundreds of millions of dollars in losses “to the exchequer.”

The report identified more than 200 oil smugglers as well as government and security officials benefiting from the lucrative illegal oil trade. 

It said that up to 2,000 vehicles, each with a capacity of 3,200-3,400 liters, are used daily to transport diesel across the border. Additionally, some 1,300 boats, each with a capacity of “1,600 to 2,000” liters, are also used to smuggle Iranian fuel.

Petroleum dealers attributed the surge in cross-border smuggling to years of U.S.-led Western sanctions on the Iranian oil sector, which compelled Tehran to seek alternative markets for its exports.

Iranian traders reportedly sell fuel in their local currency to buyers in Pakistan’s southwestern border province of Baluchistan and collect dollars from the Pakistani market. The illegal fuel is then transported elsewhere in the South Asian nation.

Islamabad mainly sources its fuel from the Middle East. The government has dramatically raised fuel prices in recent months as part of efforts to secure a new International Monetary Fund loan of about $7 billion. 

Due to depleting foreign exchange reserves, analysts believe cash-strapped Pakistan could be allowing Iranian oil to be smuggled into the country to fulfill domestic needs.

Chaudhry, while speaking Monday, cautioned that sealing the border with Iran to stop the long-standing oil smuggling without providing alternative livelihood opportunities could have disastrous consequences for poverty-stricken and underdeveloped Pakistani border towns.

The intelligence report published in May estimated that up to 2.4 million individuals in insurgency-hit Balochistan relied on the smuggling of Iranian oil for their sustenance, and they would be left without means of survival if the illicit trade were to cease.

Pakistani government officials did not immediately respond to VOA inquiries seeking a response to Monday’s revelations in time for publication.

Afghan border

Meanwhile, the military spokesperson criticized neighboring Afghanistan’s Taliban rulers for not effectively guarding their side of the nearly 2,600-kilometer border between the two countries.

Chaudhry stated that the Pakistani military has established more than 1,450 border posts while the Afghan side has only more than 200. He argued that the Taliban's limited number of posts could result from apathy or lack of resources to staff the border crossings.

“Interestingly, it's not just the lesser number of posts or the border guards,” the army spokesperson said. “We have also noticed that whenever illegal movement or smuggling attempts occur, or people are assisted in crossing the border, gunfire is typically initiated from the Afghan side, or other tactics are used to facilitate such activities.”

Pakistan maintains that anti-state militants have moved their sanctuaries to Afghanistan since the Taliban regained control of the country three years ago and intensified cross-border attacks, killing hundreds of Pakistani security forces and civilians.

There was no immediate reaction from Taliban authorities to Pakistani allegations, but they have previously rejected them as baseless, saying terrorist groups do not operate on Afghan soil and that nobody is allowed to threaten neighboring countries.