There has been an interesting twist in the situation as the government moves to shut retail outlets selling petrol and diesel smuggled from Iran.

In a hearing before the Senate Standing Committee on Petroleum on Monday (Feb 1), some important voices from Balochistan, which is the main conduit for the smuggling, said that 2.2 million people in the province derive their livelihoods from the oil-smuggling racket, and if the government moves to shut it down it is duty-bound to provide an alternative source of income to these individuals.

They recommended that the proceeds the government aims to collect from shutting down this racket, and which is estimated by Customs to be in the vicinity of Rs 150 billion (S$2.74 billion), should be used for this purpose.

The argument is unlikely to get much traction, but the point raised should give us all some pause.

The drive against smuggled oil must obviously not be halted; however, the number of people whose livelihoods will be impacted is very large – assuming that the figure is not being massively overstated – and it shows how deeply entrenched the economy of Balochistan has come to be in the cross-border rackets that thrive in that province.

It was in early January that the government announced a crackdown on illegal retail outlets selling smuggled oil, claiming more than 2,000 such outlets had sprung up across the country.

This was to be the first phase of the crackdown, with action against cross-border movement to follow.

It is not clear why this action needs to be phased in such a way. Why can the authorities not move simultaneously at the border as well as against illegal pumps selling smuggled fuel?

Everybody already knows that the cross-border movement of tankers carrying the smuggled product happens under the nose of the authorities at the border.

Perhaps the crackdown is phased in a manner so as to catch the low-hanging fruit first, which would be those pumps that have been geotagged by Customs as unlicensed and involved in the sale of smuggled fuel.

All over Balochistan, it is common knowledge that LPG as well as petrol and diesel are smuggled from across the border, which not only means that large numbers of people will be deprived of a livelihood, but also that the province could face fuel shortages as a result.

Shutting down this racket is important, but it is equally important to manage the aftermath.

Source » straitstimes