Petroleum Dealers
ISLAMABAD: The Pakistan Petroleum Dealers Association today announced that it will shut down fuel pumps across the country on July 22.
The Association has demanded an increase in its profit margins due to the ongoing inflation crisis.
The PPDA said, “Association’s more than 10,000 members will shut down all petrol pumps across Pakistan on July 22.”
Motorists rush to petrol pumps to get petrol ahead of the strike of the dealers.
In a statement, the association said it informed the petroleum minister about their concerns, but their efforts went unanswered.
They claimed that rising interest rates and inflation have badly affected their business.
The association attributed a 30% drop in sales to the smuggling of Iranian fuel into the country. According to Abdul Sami Khan, chairman of the association, the members of the PPDA will shut down on July 22.
The PPDA emphasized that the supply of petrol will remain suspended until their demands are met. Pakistan is grappling with a weakening currency and prolonged inflation, with the national rate reaching 29.4% in June, down from the record high of 38% in May.
In May, the country’s oil industry requested about Rs12/litre margin on high-speed diesel (HSD) and petrol (Mogas) for oil marketing companies (OMCs).
The OMCs’ margin on HSD was Rs6.50/litre on April 30, 2022, and Rs6/litre on Mogas. Dealers are charging an additional Rs7/litre margin on both HSD and Mogas.
The oil industry has faced significant challenges due to increased fuel prices in the international market, exchange rate fluctuations, and higher interest rates. These factors have enhanced the inventory holding costs of around Rs3/litre. Also, credit letter confirmation charges, higher demurrages, and a high turnover tax (0.5 per cent) are other factors affecting their business.
The PPDA pointed out that the revised margin for HSD and Mogas amounted to Rs6/litre during the current year. It is based on a decision of the Economic Coordination Committee on October 31, 2022.
However, they consider this revision insufficient and urgently in need of review.
