Senior visiting fellow, George Mason University
Iran’s large-scale fuel losses appear to go beyond the smuggling cited by officials in Tehran, with evidence pointing to organized diversion within the country’s fuel distribution system.
Iranian officials repeatedly say around 20 million liters of fuel are smuggled out of the country every day, costing Iran between $4 billion and $5.2 billion a year. But the figure is far less precise than it is often presented.
Official statements generally refer to “fuel,” not gasoline alone, and include diesel and other petroleum products. In July 2026, Keramat Veys-Karami, head of the National Iranian Oil Products Distribution Company (NIOPDC), said gasoline was less vulnerable to smuggling than diesel and identified transport allocations as a major source of leakage.
The government has not published the refinery, depot, tanker, customs and station-level data needed to show that 20 million liters physically disappear from the regulated system each day. Without a product-by-product balance, the figure cannot be treated as a measured flow of smuggled gasoline.
Its dollar value is equally uncertain. Twenty million liters a day amounts to 7.3 billion liters a year. Valuing that at $4 billion assumes a loss of about 55 cents per liter; a $5.2 billion estimate puts it at 71 cents. Officials rarely explain whether those figures represent replacement costs, forgone subsidy value, foreign black-market prices or smugglers’ revenue.
What the numbers show
Data released after the war reveal a strained gasoline balance, but do not account for smuggling on the scale claimed.
NIOPDC reported that between March and mid-July 2026, Iranian refineries produced around 109 million liters of gasoline a day, with another 12 million liters supplied through blending. Average consumption stood at 129 million liters.
In late June and early July, daily distribution rose to 134.5 million liters, partly because of increased road travel and Iran’s aging vehicle fleet.
Fuel-card data reveal another problem with interpreting headline numbers. Before the three-tier pricing reform introduced in December 2025, NIOPDC was loading the equivalent of 172 million liters a day in entitlements onto fuel cards belonging to 32 million eligible vehicles, even though actual consumption was around 131 million liters.
The reform reduced those entitlements to about 135 million liters a day and was followed by a six-percent fall in consumption.
But the original gap did not mean that more than 40 million liters of fuel were physically disappearing each day. It was a gap between theoretical entitlements and actual consumption—an important distinction when assessing the scale of diversion.
Establishing how much fuel actually disappears requires comparing refinery dispatches with depot receipts, tanker movements and station-level sales, rather than treating unused or inflated card allocations as physical fuel.
The border-province problem
One argument for the scale of gasoline smuggling focuses on allocations to provinces along or near Iran’s borders. But no published NIOPDC series located for 2025–2026 verifies the claim that Kerman, Hormozgan, Kurdistan and Sistan and Baluchestan together receive 17.5 million liters a day.
Nor can their “normal” demand reliably be put at 14–15 million liters without data on vehicle registrations, fuel-card transactions, agricultural demand and interprovincial traffic.
Available evidence shows why population alone is a poor measure of legitimate demand. Kerman consumed 586 million liters of gasoline during the summer of 2025, equivalent to around six million liters a day, making it one of Iran’s five largest provincial consumers.
In July 2026, the government approved an additional 20-liter third-tier quota for private vehicles in Kerman, Hormozgan and Sistan and Baluchestan, citing long distances and inadequate public transportation.
The provincial figures therefore raise a question rather than provide an explanation. If verified allocations exceed plausible consumption by only a few million liters a day, much of the claimed national leakage must occur elsewhere, or consist of diesel and other fuels rather than gasoline.
An organized supply chain
There is considerably firmer evidence for large-scale organized smuggling and diversion.
Pakistani traders and transporters told RFE/RL in May 2026 that at least six million liters of Iranian gasoline and diesel were entering Pakistan each day. A leaked Pakistani intelligence report identified around 2,000 vehicles and 1,300 boats involved in the trade and described payments moving through hawala networks.
That points to a substantial and organized cross-border economy. But even the six-million-liter estimate accounts for less than one-third of the 20 million liters Iranian officials say are smuggled daily—and it includes both gasoline and diesel.
Evidence from inside Iran points more clearly to the organized networks behind large-scale diversion.
In November and December 2025, judicial officials in Hormozgan said an investigation known as the Toofan case had uncovered 35 interconnected smuggling networks that allegedly moved more than four billion liters of fuel over several years. Authorities opened cases against 753 people described as major participants.
These remain judicial allegations rather than final findings. But the scale and structure described by investigators point to something considerably larger than subsistence smuggling by residents of impoverished border communities.
Where does the fuel disappear?
One of the strongest official clues lies further upstream, in the way fuel allocations are administered.
NIOPDC says around 60 million liters of diesel are allocated to transport operators every day through electronic waybills and acknowledges that inaccurate information about end users creates opportunities for diversion.
The evidence therefore points not to a single route or group of smugglers but to overlapping channels: manipulated fuel entitlements, transport documentation, bulk tanker movements, maritime trafficking and informal payment networks.
That does not establish that Iran’s official estimate of 20 million liters smuggled each day is wrong. It shows that authorities have not published the data necessary to establish what those millions of liters consist of or where they leave the regulated system.
Answering that question would require depot balances, tanker GPS records, station-level sales and provincial allocation data. Until those are published, attributing 20 million liters of daily smuggling chiefly to border communities risks mistaking the visible final carriers for the organized supply system that makes diversion on such a scale possible.
A review of grave listings in Tehran found a three-tier plot in sections 39 and 72 of Behesht-e Zahra, the vast cemetery on the southern edge of the capital where Iran's war dead and the founder of the Islamic Republic are buried, offered at 30 billion rials, about $15,000. Tiered graves are stacked burials sold as a single right, allowing several family members to be interred in one plot over time.
The official 2026 tariff for reserving the same three tiers in that part of the cemetery is 3.47 billion rials, roughly $1,740. The asking price in the listings is more than eight and a half times the state rate.
Set against wages, the figures become clearer. Iran's minimum base wage is about 166 million rials a month, around $83. The advertised grave is equivalent to more than 180 months of that wage: a worker on the minimum would have to save every rial for more than fifteen years, spending nothing at all, to reach the asking price. Even the official tariff comes to nearly 21 months of wages.
The market is not confined to the capital. At the Bagh-e Ferdows cemetery in Kermanshah, listings reach 34 billion rials, about $17,000. Two-tier graves at the Saheb al-Zaman cemetery in Kerman are advertised at up to 20 billion rials, some $10,000, and plots at 10 billion rials, around $5,000, appear in Karaj and Yazd.
In Mashhad, family tombs at Behesht-e Reza are priced at up to 18 billion rials, roughly $9,000, and published reports have put burial inside the shrine of Imam Reza, the holiest Shia site in Iran and a place many families regard as a religious privilege, at as much as 14 billion rials, about $7,000.
The bill for a last farewell
A grave is only one of the costs of dying. Transporting the body, ritual washing and the shroud, the burial itself, the headstone, a mosque, flowers, catering and the ceremonies each carry a separate charge.
Under Tehran's official 2026 tariff, basic services run from hundreds of thousands to several million rials. A private hearse costs 50 million rials, about $25, for the first three hours.
Adding the grave, cemetery services, a temporary headstone, a mosque or hall, flowers, catering and other costs, a burial and urban funeral for around 100 people can come to between 1.2 and 1.8 billion rials, roughly $600 to $900. A more expensive plot, a costlier stone, a full meal or several ceremonies can push it far higher.
For many families, though, the question is not whether to buy an expensive grave or an elaborate headstone. It is how to pay for an ordinary burial at all, a cost that pushes them to shrink the ceremonies, drop the traditional third-day and seventh-day gatherings, or find somewhere cheaper to bury their dead.
What has actually changed
Prices inside Behesht-e Zahra vary by zone and section, and the state rates rise every year. In rials the climb is steep: three tiers in the older sections cost 825 million rials in 2022 against 3.47 billion today, a fourfold increase.
Measured in dollars, though, the official price has barely moved. It was worth about $1,700 in 2022 and about $1,740 now, because the city council raises the tariff by a fraction of what the currency loses each year. What has collapsed is the ability to pay: Iran's minimum wage has fallen from more than $230 a decade ago to around $83.
That gap between a suppressed official price and what the market will bear is where the private trade lives. The cemetery's managing director said in 2023 that grave sales are the organization's main source of income, that capacity was running out and three new cemeteries were planned, and that each national identity number was now limited to a single plot, a rule introduced to stop what he called brokering and the emergence of "grave sultans." Such brokering, he acknowledged, exists.
Cemetery officials also dispute the highest figures in circulation. A previous managing director said the most expensive grave ever sold there had gone for a fraction of the sums now advertised. The listings reviewed for this report are advertisements placed by private sellers, not transactions recorded by the cemetery.
When a burial right becomes an asset
Iran International contacted three people who had advertised graves for sale in Tehran and Kermanshah, presenting itself as a prospective buyer. None is named here.
One, in Tehran, was selling an unused tier of his father's grave, a space the family had kept for his mother.
"Thank God our mother is alive, and right now we need this money more," he said.
In Kermanshah, another seller had listed his mother's grave, in Bagh-e Ferdows for about 40 years. He counted its position near the car park among its advantages, and said that whenever a buyer needed it, he would come to complete the transfer once the money had been paid, so that the grave could be given to them as a "gift."
A third seller in Kermanshah had bought a plot beside his brother's years earlier, intending to be buried next to him. He has put it up for sale. Finding a grave in Bagh-e Ferdows has become difficult, he said, but the money matters more for now: he is still alive, and he would rather use it for what his children need than worry about how easily they will be able to visit him later.
In this market, even a place kept to lie beside a father, a mother or a sibling can lose out to something more urgent: the money a family needs today.
Graves at auction
Burial rights are not only offered as assets in private listings. Court enforcement records show they can be seized and auctioned to settle debts.
In 2022, a single tier of a grave in section 36 of Behesht-e Zahra was put up for auction. In June 2025, so was a grave in section 62 of Bagh-e Ferdows in Kermanshah.
Open trade in graves is not permitted in many Iranian cemeteries, and transfers of burial rights are supposed to go through official channels. In Tehran, the right of use must be registered through the Behesht-e Zahra organization.
The restrictions have not ended the market. Listings continue to appear, and some transfers are dressed as gifts, as the Kermanshah seller described.
The result is a market with almost no transparency: there is no comprehensive official record of how many such deals are done, no clarity on the prices finally paid, and no certainty that a right advertised in a listing can lawfully be transferred at all.
The migration of the dead
Another consequence is visible in the villages around some Iranian cities.
Reports from areas near Mashhad and Gorgan describe urban families moving the bodies of relatives to village cemeteries, where burial is free or cheap, to reduce costs.
One described a rise in city families turning up at rural graveyards. In another village, residents built a fence around the cemetery to stop outsiders being buried there.
Similar accounts have emerged from other cities. There are no official figures, but the cases suggest the price of a grave is now capable of redrawing the geography of burial.
Prices are not driven by inflation alone. Older cemeteries are running short of capacity, families want to be buried alongside relatives, and the religious standing of certain sites carries a premium of its own.
The pressure works in both directions at once: one family drives a body out of the city to save money while, in the same period, a burial plot in an old cemetery becomes an asset worth the equivalent of years of work.
Mourning under financial and security pressure
For some families the difficulty of burial is not only economic.
Reporting on those killed in protests and on people executed in Iran shows that the release of a body, the place of burial and even the holding of a funeral can fall under the control of security institutions. In some cases that pressure has come with a demand for money.
The family of Babak Pourmazaheri, a 37-year-old protester killed in Alborz province, received his body after three days and a payment of 4 billion rials, about $2,000.
In the case of Jamshid Momeni, 16 billion rials, roughly $8,000, was demanded for the return of his body; when the family said they could not pay, they were asked instead to present him as a "martyr of the state."
In the case of Esmail Fekri, the family was not told where he had been buried, and a security officer demanded 1.5 billion rials, some $750, to reveal the location of the grave.
Here the cost of death is no longer the price of a plot and a ceremony. Money has become entangled with control over the body, the burial and the right to grieve.
Two sides of the market
In a market where a burial right can be worth years of wages and can be auctioned to settle a debt, some families are selling the very place they had kept for themselves or their relatives, in order to pay for living.
In Kermanshah, a man bought a grave beside his brother's years ago. He has now put it up for sale.
He says he needs the money for his children more than he needs somewhere to be buried.
