ISLAMABAD : Iran has launched a border market to sell diesel fuel to buyers in Pakistan and Afghanistan. The move has been taken to counter smuggling of fuel at border areas. As the US and EU tighten sanctions on Iran, a lucrative cross-border industry of smuggling fuel and goods has emerged, bolstered by a sharp drop in the value of the Iranian currency. Fuel, especially diesel, is being moved illegally out of the country through cities bordering Afghanistan, Pakistan and Turkey, says Alireza Zeighami, deputy oil minister.

 for refining and distribution.

Between 7 million-10 million liters of petrol and diesel are smuggled out every day, according to Iranian state media. Analysts are attributing a 7 per cent rise in fuel consumption to an increase in smuggling activity.

Diesel is priced at 3,500 rials (14 cents) a liter, but smugglers can sell it at about seven to 10 times more to Iran’s neighbors. “Smuggling will decline if prices change,” says Zeighami.

Recently Zeighami said Iran is currently exporting 20 million liters of oil products per day. Strategic reserves of gasoline and diesel fuel will be increased by 1.3 billion liters in the current year, he noted.

Zeighami said that a package of investment, worth $47.5 billion, has been prepared to develop different sectors of the oil refining and distribution industry. Iran is now exporting gasoline and diesel fuel to neighboring countries, Zeighami said.