450 million liters of gasoline would be sold to Iran’s neighboring countries per year. (AP)

By Ehsan Mehrabi

March 1, 2021

Last week’s demonstrations began in Saravan city, where two years ago protesters had also set fire to the Jalegh County governor’s office. That year, however, the unrest did not escalate any further.

The Razzagh Plan was proposed to allocate fuel quotas to border residents in an attempt to quell protests such as these. The plan already existed in other forms but since this year, new regulations have been added.

Back in August 2011, the Cabinet had approved a plan according to which the Ministry of Petroleum was obliged to sell fuel products to the residents of villages located within 20 km of the border, at a subsidized price of less than the market value of fuel at gas stations in these areas. Then in 2013, the government announced the implementation of a new plan that was, on the face of it, exactly the same: they were to give quotas of fuel to border residents priced at 2,300 tomans for them to sell across the border.

At that time, the intention was to set up fuel exports by local people in the provinces of Razavi Khorasan, South Khorasan and Sistan and Baluchistan. The plan coincided with the end of sanctions against Mahmoud Ahmadinejad’s government and government officials described it as a plan to “use Iran’s border residents to increase oil exports”. Perhaps for this reason, Molavi Abdol Hamid, the Friday Imam of Zahedan, said  government officials were welcoming the use of fuel smugglers in order to circumvent sanctions. 

Razzagh Plan Emerges After Multiple False Starts

In the intervening period, Iranian media began to report that neither this plan nor similarly-described ones in the past had not been implemented. Or where they had been implemented, no money had yet reached the residents of the border areas.

Sharq newspaper wrote that ahead of the supposed implementation, “Border cards were issued and companies called ‘border cooperatives’ were registered. But for most locals, this lucrative business started and ended with opening an account.

The key difference between the direction of the Razzagh Plan and fuel plans of previous years is the difference in the price of the dollar, which has increased practically tenfold since then. This issue has in turn made fuel smuggling more lucrative. But on the other hand, it has increased the involvement of government institutions in taking over the fuel quota meant for border residents. 

Importantly, the designer and executor of the Razzagh Plan, unlike older schemes, is the IRGC. Two years ago it was none other than Mohammad Marani, commander of the IRGC Ground Force’s Quds Base in the southeast, who first proposed the plan. He suggested that each family receive about 300 liters of gasoline per week, with which they could earn about three million tomans a month by selling it in Pakistan.

Marani had emphasized that the IRGC would combat any fuel smuggling after the implementation of this plan. Prior to its implementation, the roads used for fuel transportation were essentially divided into “formal” and “informal” lanes, and some time ago, Marani had acknowledged that the border forces had shot at a group of fuel “smugglers” in Jalegh. “About 500 motorcycles had illegally opened a passageway, each carrying 60 liters of fuel,” he said.

On July 31, 2020, the commander of the Revolutionary Guards in Sistan and Baluchistan province announced the opening of multiple development projects to further the “elimination of deprivation”. The projects intended to harmonize cross-border trade and had also been communicated a month earlier by Iran’s vice president Eshagh Jahangiri.

According to this drastically slimmed-down scheme scheme, 450 million liters of gasoline would be sold to neighboring countries per year. Each household in border villages covered by the scheme would receive a maximum of 1,500 liters of gasoline per year: fewer than 30 liters per week, or a tenth of what had been promised before. Residents were issued with new identification cards with which to legally receive fuel, and for each “Razzagh Card”-bearer, one car would be allowed to cross the border at a time.

Baluch activists have accused the Revolutionary Guards of plotting to sell fuel products to Pakistan themselves. The Revolutionary Guards have also stated that after the Razzagh Plan is fully implemented, it will stop all other transportation routes of fuel to Pakistan. It comes even as some government officials insist that 70 percent of fuel “smuggling” is done on a completely legal basis using fuel tankers, while the share of small smugglers and border residents who transport fuel in cars and Toyota vans is only 30 percent.

Guards and Government Clash Over Residents’ Share of Fuel

Critics of the IRGC say that the Razzagh Plan will essentially see the Guards take over the economic and political management of fuel turnover in Sistan and Baluchistan. There have also been disputes between the IRGC and government institutions over its implementation. The question of why the Revolutionary Guards should control the sale of Iranian fuel abroad, and the revenues generated by it, has incensed some parts of the government and remains unanswered.

One report by Mehr news agency stated that the National Company for Distribution of Petroleum Products had stopped distributing fuel at stations affected by the Razzagh Plan. Local families had been due to receive gasoline from the designated stations within a distance of 5km from their homes and transport it to Pakistan through designated routes. Not only had the Ministry of Petroleum not installed the stations to start with, leading them to be set up by the IRGC instead, but fuel went undelivered for up to 10 days at a time.

Conflict between institutions over border fuel quotas is a long-standing issue and not limited to Sistan and Baluchistan. But it has made headlines more often in the past few years and criticism has recently been levelled at the Ministry of Interior as well as the Ministry of Petroleum.

Traditionally, fuel products were delivered to local cooperatives who would in turn divide them up between residents to sell. Two years ago Abdollah Badiechi, director of the Sistan and Baluchistan Border Cooperative, spoke against the Ministry of Petroleum’s cut in the quota of fuel afforded to cooperative members – leading to a group of MPs calling in 2019 for an investigation into border fuel quotas.

Unfortunately,” said Alireza Beigi, an MP for Tabriz, “the interference of some departments in the sale of fuel by border residents has led to their distrust in the department, which sells the fuel on their behalf.”

Border cooperatives had also accused village councils and the Interior Ministry’s villages division of using the quota to sell petroleum products themselves, but not distributing the proceeds to residents. Government agencies have repeatedly failed to publish any report on the overall income generated by the sale of petroleum products, nor on how this income is distributed among border residents.

Sharq newspaper wrote: “In Zahak city, only in 2017 and 2018, 13,343,000 liters of fuel were sold, which if we consider the profit from the sale of each liter across the border at least 800 Tomans, 10.672 billion tomans is the amount of profit from sales. But the total amount of deposits to border families since 2015 has been something close to 5.8 billion tomans.

According to this newspaper, in Chabahar city in 2017 and 2018, the profit from the sale of fuel amounted to around 16.151 billion tomans. But since the beginning of the project in this city, only about 2.5 billion tomans had been paid to the border residents. Meanwhile the fuel quota in Chabahar was at least two million liters per month, while the neighboring city of Sarbaz had paid out five billion tomans to its people on a monthly quota of under one million liters.

According to government regulations, a work group comprising representatives of the Ministry of Petroleum, the Ministry of Interior, the National Petroleum Products Distribution Company, the Ministry of Industry, and the Anti-Currency and Commodity Smuggling Headquarters, oversees the type of fuel, its quantity and how it is sold. This work group is stationed in the provinces themselves. But not one report on its actions or monitoring activities, nor on the distribution of fuel income, has yet been published.

For 60 years now there have been discussions around providing facilities for the export and import of goods to border residents. Back in 1965 a law to make concessions to the residents of the border was approved by the parliament. Ever since that time, it has been argued that central government, due to its inability to provide adequate living conditions for border residents, must grant them the right to import and export goods themselves. But over time, these privileges have become the sole preserve of a few residents of these areas, and the over-arching problems still remain.

Iran Wire

About Track Persia

Track PersiaTrack Persia is a Platform run by dedicated analysts who spend much of their time researching the Middle East, in due process we fall upon many indications of growing expansionary ambitions on the part of Iran in the MENA region and the wider Islamic world. These ambitions commonly increase tensions and undermine stability.