Fuel imports surge as smuggling curbed
KARACHI: A significant jump in import quantities of high-speed diesel (HSD) was observed during FY21 ended June 30, 2021, as the authorities have cracked down on smuggling of diesel from neighbouring Iran.
As much as 17,735 tonnes of HSD was legally imported during FY21, seven times higher as against 2,048 tonnesd imported in FY20. Similarly, HSD imports during July 2021 clocked-in at 35,521 tonnes, compared with 5,875 tonnes in July 2020, the data issued by the Pakistan Customs suggests.
An official said since the petroleum levy has been reduced to almost zero on fuels, the authorities aimed at increasing revenues through curbing smuggling and routing the commodity to be imported legally.
According to the official data, the Customs authorities collected import duty of Rs325 million on HSD during July 2021, which is multiple times higher than Rs46 million collected in July 2020.
Similarly, the import duty on the import of motor spirit during July 2021 clocked-in at Rs2.8 billion as against Rs903 million in July 2020.
Analysts also attribute resumption of business and industrial activity post-Covid-19 as one of the reasons behind higher fuel imports.
It is not clear how much Iranian fuel is smuggled in Pakistan, but a 2015 estimate suggested it could be nearly 700,000 litres/day. Last year, the Iranian officials estimated smuggling of up to 11 million litres of fuel out of their oil-rich country each day.
The most common item smuggled from Iran to the rest of Pakistan is Iranian petrol and diesel. Some of the Iranian fuel is also smuggled in small ferries from the Iranian city of Chabahar to Gwadar, Pakistan’s new port city.
The Pakistani officials said they want to eradicate the illegal trade through the law-enforcement and development projects in Balochistan. But unsuccessful efforts against the practice highlight the link between instability and underdevelopment in the vast, resource-rich region that has reeled from separatist violence, military crackdowns, and terrorist attacks.
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