Petrol dealers go on strike to press govt for margin hike

Our Correspondent
Thursday, Nov 25, 2021

KARACHI: Consumers brace for a fuel crisis as petroleum dealers will switch off pumps from Thursday (today) to press authorities into jacking up their profit margins from 2.5 percent to 6.0 percent.

“The PPDA (Pakistan Petroleum Dealers Association) will observe indefinite strike by suspending the supply from its petrol pumps from November 25, 2021,” said Abdul Sami Khan, Chairman PPDA addressing a press conference at Karachi Press Club on Wednesday. Khan said the association was forced to opt for this move because of the government’s failure to honour its commitment of increasing dealers’ profit margins.

The announcement came at a time when Federal Energy Minister Hammad Azhar tweeted: “The ministry is in touch with petroleum dealers association and a summary regarding revision of their margins has already been tabled in ECC and a decision will be taken in its next session”.

Sami said the PPDA wanted the margins to be raised to 6.0 percent from existing 2.5 percent.

He said the association had called a strike earlier on November 05, 2021, and appealed to Prime Minister and Energy Minister to resolve dealers’ issues.

In response to PPDA appeal, he added, federal government invited the dealers to Islamabad. “We had meetings and discussions with the authorities, who agreed to our demand of increasing our margin,” Khan said. In the wake of the meeting, a committee headed by Secretary Petroleum was formed, which included relevant government officials as well as the representatives of dealers.

“We were told the summary for the same would be shared with us before its submission to the ECC; however, no such consultation took place,” Khan added.

“This has compelled us to close down the petrol pumps for indefinite period,” he said adding, “The association feels the pain the consumers are going to face due to the closure of the petrol pumps, but the government didn’t leave us with any option”. The PPDA chief cited the high cost of doing business as the main reason for raising the margins of dealers.

He said daily expenses of the petrol pumps had gone up three times due to soaring prices of electricity, salaries of employees, high ratio of taxes etc, which was making it difficult for the dealers to continue their business.

In an early statement the association even went as far demanding the government to cancel their petrol pumps licences arguing that nearly 50 percent of the petrol pumps would close down permanently with licence cancellation as no one would reapply for acquisition. The petroleum dealers also proposed that the government could offset the rise in dealers’ margins by reducing Sales Tax and PDL (Petroleum Development Levy).