By The Free Iranian
On Saturday, September 7th, near Farsi island in the Persian Gulf, the Hormozgan province coast guard seized what they called a “tugboat” manned by 12 Filipinos, containing 284,000 litres of diesel, worth about $2.8 million.
Asserting that the vessel’s crew were involved in smuggling Iranian processed fuels to neighboring countries in the region, the regime’s action comes at a time when Tehran’s forces have been increasingly menacing towards foreign commercial shipping in the Gulf.
In July, two British tankers were illegally seized in retaliation for Britain’s having impounded an IRGC-owned vessel in Gibraltar that was carrying oil to Syria, in violation of international sanctions. Although the British eventually let the IRGC vessel go, some of the crew members of those British ships remain detained in Iran. Tehran was also recently implicated in an attack on oil installations in the UAE, one of its regional enemies.
Fuel smuggling is said to have become endemic in Iran. The combination of fuel being sold in Iran at extremely low, subsidized prices, (currently .09 cents per litre for gasoline, and .03 cents for diesel) along with the hyperinflation of the past year and a half having reduced the value of the Iranian rial to nearly nothing of at all, has made fuel a valuable commodity to be illegally exported and sold on the black market. Just this year, tens of cases of vessels attempting to carry refined petroleum products out of Iran being seized by regime forces have been reported. Most of these vessels were stopped near Farsi island, which holds a large IRGC naval base.
Of course, the IRGC itself has also been accused of smuggling fuel. Once referred to by former regime president Ahmadinejad as “our smuggler brothers,” the Guards are famously involved in a number of criminal enterprises. Their control of a network of private seaports and airports inside Iran give them the means to import and export goods, at will. The Guards’ recent vigilance in combatting fuel trafficking, then, could be cynically perceived as one Mafia family’s attempt to eliminate freelance competitors.
Another aspect to consider in regard to the fuel situation in Iran is the deterioration of Iran’s petroleum refining capacities. The National Iranian Oil Company’s Abadan refinery, the largest in the world, has recently been reported to be seriously dilapidated, due to its age, and the fact that it hasn’t been repaired or renovated in years. The refinery has also had to deal with work shutdowns caused by labor problems, as the oil company has not been reliably paying their employees. In such a situation, the attention paid to fuel smuggling might be an attempt to prevent another gasoline shortage.
In 2007 and 2008, Iranians suffered through brutal gasoline rationing, caused in part by sanctions, but mainly because of the regime’s lack of investment in the petrochemical processing sector of the economy. Now, ten years later, it seems nothing has been done to correct that situation, and another gasoline shortage may yet be on the way.