South Asian Business news and information

Due to price increase of petroleum, smuggled petrol from Iran has become very popular in Pakistan. This is hearting the local businessmen. According to the report published in paktribune.com, because of smuggled petroleum, Pakistan government is loosing Rs. 5 billion to 6 billion per year. The World Bank officials have told Pakistan government to take necessary steps to stop this activity and save the stakeholders. I am quoting from the report:

 “It may be mentioned here that during the last government of Nawaz Sharif the price of diesel was Rs9.90 per litre while petrol was available between Rs23 and Rs25. Over the years, the price of petroleum products increased twice, whereas in Pakistan, they were increased four times. The price of diesel, which has a large consumer base in agriculture dependent areas, shot up to Rs39.60. As a result, its impact was felt on this sector. Cost of transporting agricultural produce rose, which in turn increased the prices of daily-use commodities four times.

Crude oil was available for $72 per barrel in the international market, which has now been decreased to $67, but this has not affected the prices of petroleum products in Pakistan.”

Pakistan has a long history of smuggling petrol from Iran. Balochistan, the largest province of Pakistan, and Sindh are the two main markets of smuggled petroleum products. Recently, the market has been expanded to Punjab and North West Frontier Province. The main advantage of smuggled products is cheaper price. One litre Iranian petrol can be found at half the price of per liter petrol sold in Pakistan. Presently smuggled petroleum is openly sold in Lyari, North Nazimabad, New Karachi, Nusrat Bhutto Colony, SITE and Orangi town areas at Rs. 28 to Rs 34 per liter. The worst part of the matter is that many high government officials and law enforcement officials support this activity. It is a big source of income for them.

Price of petroleum is not only major problem in Pakistan but more or less in all the countries of the world; even in USA. Few months ago, Nepal observed a serious protest following the rise of fuel price. It is a very sensitive issue. I hope that Pakistan government takes strict legal actions against smuggling petroleum. At the same time it should start promoting alternative energy resources in the country so that people do not have to suffer from rising fuel price in future.

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Paktribune