The Pakistan Petroleum Dealers Association (PPDA) announced on Wednesday that its negotiations with the provincial and federal governments, as well as other stakeholders, had reached an impasse. This has led to their decision to initiate a nationwide strike on July 5 (tomorrow).
PPDA chairman Abdul Sami Khan, stated that despite meetings with nearly every relevant government stakeholder, including unnamed officials, the finance minister, the chairman of the Federal Board of Revenue, the chief of the Oil and Gas Regulatory Authority, the petroleum secretary, and representatives of the oil marketing companies’ advisory council, the dealers’ grievances remained unresolved.
“They requested that we call off the strike and assured us of resolving the issue, but we cannot delay the strike based on mere promises,” Khan said. He emphasized that no further talks would be held with the government until the “unfair” turnover tax was rescinded, warning that petrol stations would begin running dry on Thursday. Khan described the double taxation as not only harsh but also unconstitutional.
Closure of 13,000 Stations
Khan announced that over 13,000 petrol stations would close from 6 am on July 5, with the strike potentially extending over subsequent days until their demands were met and officially notified. He urged owners and operators of retail outlets to conserve their stocks for July 4.
In response, the petroleum division established a monitoring cell to oversee fuel supply and coordinate with stakeholders during the strike. Representatives from oil marketing companies, the Oil and Gas Regulatory Authority (OGRA), and the petroleum division have designated focal persons to be part of this monitoring cell.
The petroleum division reiterated its directive to oil marketing companies (OMCs) to ensure adequate stock levels of petroleum products at company-owned, company-operated, and associated sites to prevent supply chain disruptions and inconvenience to the public and industry.
The dealers are protesting against the turnover tax introduced in the recent budget. They argue that they are already paying an advance fixed withholding tax of Rs1.4 per litre (approximately 12% of the dealer commission) as final income tax and are now facing double taxation with the additional 0.5% advance turnover tax due to a definitional issue concerning ‘dealers and distributors.’
The FBR chairman had previously assured the dealers that the turnover tax would be revoked. However, as explained by the petroleum secretary, this involves a lengthy process. The turnover tax was implemented through the Finance Act 2024-25, passed by parliament and endorsed by the president, and reversing it requires a legislative process.
