KARACHI: Amid easing prices from unprecedented levels, industry stakeholders still complain that diesel smuggling from Iran continues unabated, while the government has yet to take serious action to curb the influx of smuggled products despite repeated reminders.
Local diesel sales in May plunged to 15,000 tonnes per day from 20,000-22,000 tonnes per day, indicating that the country consumed 5,000-6,000 tonnes of smuggled Iranian diesel, causing a loss of sales to the local industry.
Sales of diesel in May stood at 455,000 tonnes, down 32pc year-on-year and 17pc month-on-month, while 11MFY26 sales inched up by 1pc to 6.354m tonnes.
Oil Companies Advisory Council (OCAC) Secretary General Dr Syed Nazir Abbas Zaidi told Dawn that he does not have the full month’s sales figure for June, but the volume of illegal high-speed diesel arrivals from Iran might have ranged from 3,000 to 4,000 tonnes per day. Diesel prices in Pakistan had been trending lower, and there might have been a drop in the prices of smuggled HSD as well, following declines in global oil and finished-product prices.
Industry players say low-quality Iranian fuel costs Rs220-240 per litre, but damages engines
Diesel prices in the country were Rs399 per litre on May 1, down to Rs311.47 per litre now.
Iranian diesel costs Rs220-240 and still enjoys a price advantage over locally produced diesel. On average, it is Rs100 per litre cheaper, attracting transport operators by offering an option to lower their fuel costs at the expense of damaging their engines, he claimed.
Diesel demand usually remains high in May due to wheat harvesting, as transporters move grain from the producing areas of Punjab and Sindh to different parts of the country. Another peak in diesel demand occurs every November due to the harvesting of other crops.
The share of diesel in transporting agricultural goods is over 75pc of total sales, while its demand in cities remains normal, Mr Abbas said.
He said that OCAC had informed the government in mid-May about the low uplift of diesel from local refineries. During a discussion with the Oil and Gas Regulatory Authority (Ogra), the refineries collectively highlighted that, rather than curtailing refinery production, all possible measures may be considered to address the increasing cross-border inflow of petroleum products, which appears to be affecting demand for locally refined products.
There are growing concerns that, if left unaddressed, such inflows may continue to rise and potentially reach levels observed in previous years, thereby adversely affecting refinery throughput, operational sustainability, and the overall domestic supply chain.
“Our main concern now is diesel smuggling from Iran which needs to be stopped to avert any crisis in the local refineries and oil marketing companies,” he said, adding that “there is no serious issue of informal “petrol” arriving from the same neighbouring country, but it is confined to Balochistan mainly.
Mr Abbas said the quality of locally produced diesel is far superior to the smuggled Iranian counterpart. Regarding petrol, consumers start facing problems when a car engine starts knocking or develops other engine-related issues, and they finally stop using Iranian petrol.
Published in Dawn, June 28th, 2026