The Pakistan Petroleum Dealers Association (PPDA) on Thursday announced the shutdown of fuel pumps across the country on July 22, demanding an increase in profit margins amid the inflationary crisis.
“We will shut down all petrol pumps across Pakistan on July 22, at 6 pm,” said the association, which has over 10,000 more members.
In a statement, the association said their concerns were conveyed to the Petroleum Minister but to no avail.
The official statement said interest rates and inflation have hurt the business of operators and called for an increase in dealership margins.
It said that sales have fallen by 30 percent due to the smuggling of Iranian fuel into the country.
“Around 8,000-9,000 (operators) … who represent us will be shut down on July 22,” association chairman Abdul Sami Khan told JEE News.
The association said that the supply of petrol will remain suspended until the demands are met.
Pakistan has been dealing with a weakening currency and prolonged periods of inflation, with the national rate reaching 29.4 percent in June, down from a peak of 38 percent in May.
Earlier in May, Pakistan’s oil industry had asked for a Rs 12 per liter margin on High Speed Diesel (HSD) and Mogas (petrol) given the high cost of doing business.
In the petroleum review on April 30, 2022, OMCs’ margin on HSD was Rs 6.50 per liter compared to Rs 6 per liter on Mogas. Apart from OMCs’ margin, dealers were charging a margin of Rs 7 per liter on HSD and Mogas.
The oil industry has been facing severe challenges since last year due to the increase in cost of doing business. The reasons vary from rising fuel prices and exchange rates in the international market to rising interest rates (which lead to inventory holding costs of around Rs 3 per litre), letter of credit confirmation charges, high demurrages, and high turnover tax (0.5 per cent) etc.
The oil body pointed out that based on the decision of the Economic Coordination Committee (ECC) on October 31, 2022, the margin for HSD and Mogas has been revised to Rs 6 per liter during the current year. However, the same is insufficient and needs urgent revision.
