Iranian Fuel Smuggling Into Pakistan Surges, Driving 27-Year Low in Official Sales
Updated
Updated · BBC.com · Jun 16
Iranian Fuel Smuggling Into Pakistan Surges, Driving 27-Year Low in Official Sales
3 articles · Updated · BBC.com · Jun 16
Summary
Pakistan says security forces seized about 1.3 billion rupees, nearly $5 million, of smuggled fuel in the past year as illegal Iranian petrol and diesel flows rise.
The surge has accelerated in recent months as the US-Israeli war against Iran disrupted oil flows through the Strait of Hormuz, lifting prices and making cheaper smuggled fuel more attractive in Pakistan.
Pakistan's oil industry says the trade is biting hard: refineries warned the government in May, and the Oil Companies Advisory Council said official petroleum sales for this season hit a 27-year low.
In Balochistan, where poverty and insecurity are entrenched, smugglers haul fuel across a 900km border despite lethal heat, fire risks and conflict; a leaked intelligence estimate put the trade at $1 billion a year and involving 2.4 million people.
The crackdown faces structural limits because remote border areas are hard to police, legal fuel supplies do not reach some districts, and analysts say traffickers linked to Iran's IRGC may be exploiting wartime price spikes and sanctions.
As a US-Iran peace deal looms, what is the future for Balochistan’s millions of fuel smugglers?
Does the billion-dollar fuel trade fund an insurgency threatening key US and Chinese projects in the region?
Under Siege: Pakistan’s Fuel Market Crisis of 2026—Smuggling, Sanctions, and Socioeconomic Fallout
Overview
In May and June 2026, Pakistan's fuel market plunged into crisis, with severe shortages, soaring prices, and widespread panic buying leading to social unrest. This turmoil was fueled by Pakistan's heavy dependence on imported energy and regional trade routes, making the country highly vulnerable to disruptions. Rampant smuggling of cheap Iranian fuel—about 4 million liters daily—further destabilized the market, undercutting official sales and government revenue. The crisis exposed deep economic vulnerabilities and highlighted how global conflicts and regional disparities can quickly disrupt daily life, strain public finances, and threaten social stability across Pakistan.