Karachi, 20 July, 2023 (GNP): The Pakistan Petroleum Dealers Association (PPDA) announced a nationwide strike on 22 July, demanding an increase in profit margins due to the overwhelming impact of surging inflation.
The association, consisting of nearly 10,000 members, issued a statement on Thursday saying it will shut down all petrol pumps across the country at 6 pm on 22 July.
Also Read: IMF new $3bn loan program to support Pakistan’s economic stabilization
Blaming the petroleum ministry for not addressing their concerns, the PPDA expressed distress over the dwindling profit margins faced by fuel pump operators. They highlighted the adverse effects of escalating interest rates and inflation on their businesses, urging for an immediate raise in dealership margins.
The association revealed a staggering 30% decline in sales due to the smuggling of Iranian fuel into the country. As a result, they have taken a decisive step to suspend the supply of petrol until their reservations are acknowledged and resolved.
“Around 8,000-9,000 (operators) … represented by us, will be shut on 22 July,” said Abdul Sami Khan, chairman of the association.
Pakistan is currently grappling with economic challenges, witnessing a weakening currency and persistently high inflation rates. In June, the national inflation rate reached 29.4%, slightly down from a record of 38% in May.
Also Read: Government announced price-cuts in petrol prices
Earlier in May, Pakistan’s oil industry sought a margin of Rs12/litre on high-speed diesel (HSD) and Mogas (petrol) for oil marketing companies (OMCs), citing the escalating cost of doing business, which has resulted in financial hardships.
In the petroleum review on 30 April, 2022, the OMCs’ margin on HSD was Rs6.50/litre, while it was Rs6/litre on Mogas. Additionally, dealers charged Rs7/litre margin on both HSD and Mogas.
The oil industry has been grappling with severe challenges since the previous year, owing to the rising fuel prices in the international market, exchange rate fluctuations, increased interest rates, and credit letter confirmation charges leading to higher demurrages and high turnover tax (0.5 percent).
The PPDA emphasized that the current year’s revision of the margin for HSD and Mogas to Rs6/litre, based on the Economic Coordination Committee’s decision on 31 October, 2022, remains inadequate and urgently necessitates a review.
