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Thousands of tons of cooking oil, ghee being smuggled from Iran

Ah ... few things.

1) Smuggling discourages the people who are trading/importing legally by shrinking their margins and putting them out of business.
The cooking oil industry in Balochistan is virtually non-existent. Oil can only be produced in the more fertile lands of Punjab and Sindh, and it is unlikely that the trade will leave Balochistan/KPK regions because both regions need the resources urgently
2) Smuggling creates black money which facilitates other criminal activities.
4) It decreases the revenue collected by the country (sales tax) resulting in wider budget deficit. State increase the tax on common citizens making things expensive for law abiding citizens.
there are one 1% of the population that pay their taxes anyway, though?
Pakistan's underground economy has always been sprawling compared to its published economy
This is masoom holy oil and these people are innocent. The problem is on the Iranian side.
its all halal i would smuggle too if m government is etitled imf loans and taking of my land.
How can the Iranians be so good that they produce huge amount of these products in spite of all the sanction regimes they are under, smaller country than Pakistan and export it to Pakistan and make a profit out of the whole enterprise while the Pakistan businesses fall like ninepins and close the business and go home at the first sign of trouble?
TBF Iran is twice the size of Pakistan at one third the population, adding to that its a extremely rich in mineral resources!!
Quetta is one of the most lucrative posts. You know why.

Oil, cars, food items, gold, arms. Every kind of smuggling you can think of happens under the watchful eye of military inc.
Geographical area wise or population wise? I think you meant the former. That shows the credibility of your posts.
While talking about economic activities, it is obvious that it means by population. We say Japan and Germany are 'large'; Kazakhstan and Mongolia are 'small'.
@khansaheeb wrote: As long as it keeps prices down who cares. Let's make it official then at least the gov can collect import duty.

The moment you do it, the imported stuff would become as expensive as the local stuff. Yeah the overall price would come down but then there would be an outflow of dollars which the Imported govt is worried about.

importing from Iran by smuggling means, paying for it using $$
$ are coming by converting local currency (PKR) into $ and buying stuff from Iran
this puts pressure on the PKR - USD conversion, removes $s from the market without any trace
Is Iran buying anything in return to ensure balance of trade? or is it mostly one way as of now?
ISLAMABAD: Thousands of tons of cooking oil/ghee are being smuggled from Iran in different cans of 5 to 20 kilograms, causing heavy losses to the country's formal sector and national exchequer, which runs into billions of rupees.

The formal sector of ghee/cooking oil complained that the government also provided massive exemptions of GST and income tax to the industrial ghee/cooking oil units located in erstwhile FATA/PATA areas through the Finance Act 2021-22.

As such, these units paid close to Rs7,000 per ton customs duty while other units located in the settled areas were paying Rs32,000 ton on raw material. So the units located in settled areas were facing disadvantageous position.

This issue was raised during the National Price Monitoring Committee (NPMC) under the chairmanship of Minister for Finance Shaukat Tarin but so far, no solution could be found so far.

There has been one proposal floated in the NPMC meeting that the input adjustment should be introduced, so that all units could claim refunds but there was no clear-cut decision yet. The industry sources said that sofar 250,000 tons raw material were being imported by the units located in the FATA/PATA areas for meeting consumption requirement of just 5 million population.

On the issue of smuggling from Iran, the industry sources said that total consumption of cooking oil/ghee stands approximately to the tune of 350,000 tons all over Pakistan, including 125,000 tons cooking oil and 225,000 tons ghee on per month basis. The industry sources said that 500 tons to 1,000 tons was being smuggled from Iran on daily basis, causing billions of rupees losses to the national exchequer.

The official sources said that both the land and sea were being used to smuggle goods, especially cooking oil from Iran these days, and there was an incentive for smuggling because the cooking oil and ghee prices had escalated in the domestic market in the wake of higher palm oil prices in the international market. The palm oil prices almost doubled in international market jacking up from $700 per ton to $1,400 per ton and there was no possibility that its prices would come down in international market because in Malaysia the employees working on palm oil fields were not available owing to Covid-19 restrictions. The industry sources said that the government did not bring down the General Sales Tax (GST) on import of palm oil from 17 to zero percent and abolishing 2 percent Customs Duty despite making commitments publicly. Now it seemed that the smuggling was allowed rampantly so that the domestic prices could be shown reduced.

When contacted, Executive Member of Pakistan Vanaspati Manufacturers Association (PVMA) Umar Rehan said that the cooking oil/ghee was being smuggled from Iran through Balochistan in thousands of tons and even some social media platforms were advertising different brands openly but there was no action on the part of the government. He said that the Iranian cooking oil was being dumped at cheaper rates and it was even available online in Pakistan. He said that the formal sector was facing huge losses because it was importing palm oil by paying taxes and making products but this Iranian cooking oil had obtained market share in the range of 10 to 15 percent.

What I find odd is the the name "Pakistan Vanaspati Manufacturers Association"

Given how pakistani members here detest everything sanskrit or hindu, Using the term like "vanaspati" is quite odd.
The cooking oil industry in Balochistan is virtually non-existent. Oil can only be produced in the more fertile lands of Punjab and Sindh, and it is unlikely that the trade will leave Balochistan/KPK regions because both regions need the resources urgently

In case if you have missed it, this was being discussed in past few posts:

You can count the number of trucks if you'd like.

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