- The Minister of State reached Karachi to persuade the PPDA to call off the strike.
- Mussadiq Malik interacted with petroleum dealers to redress their grievances.
- Amidst inflation crisis, fuel dealers have demanded increase in profit margin.
The Pakistan Petroleum Dealers Association (PPDA) has postponed the strike to shut down fuel pumps across the country by two days.
The development took place after the association’s members held talks with Minister of State for Petroleum Mussaddek Malik, who reached Karachi earlier today (Friday) to persuade the PPDA to call off the countrywide strike.
In a statement, the PPDA said they may hold another round of talks with the government after two days.
A day earlier, the PPDA had announced nationwide shutdown of fuel pumps from July 22, demanding an increase in profit margins amid the inflationary crisis.
“We will shut down all petrol pumps across Pakistan at 6 pm on July 22,” the association said. The association further stated that it has more than 10,000 members.
The association said in a statement that their concerns were conveyed to the Petroleum Minister but to no avail.
The official release said that interest rates and inflation have affected the businesses of the operators and called for increasing the dealership margins.
It added that sales have dropped by 30% due to the smuggling of Iranian fuel into the country.
“The approximately 8,000-9,000 (operators) we represent will remain closed on July 22,” the association’s president, Abdul Sami Khan, told Reuters.
The association said that the supply of petrol will remain suspended till the demands are met.
Pakistan has been battling a weak currency and a prolonged period of inflation, with the national rate reaching 29.4% in June, down from a record high of 38% in May.
Earlier in May, Pakistan’s oil industry demanded Rs 12 per liter margin on high-speed diesel (HSD) and Mogas (petrol) for oil marketing companies (OMCs) in view of the high cost of doing business, which has created financial difficulties.
In the petroleum review as on April 30, 2022, the OMC margin on HSD was Rs 6.50/litre as against Rs 6/litre on MOGAS. Apart from OMC’s margin, dealers were charging Rs 7 per liter margin on HSD and Mogas
The oil industry has been facing serious challenges since last year due to rising cost of doing business. The reasons may vary from increased fuel prices and exchange rate in the international market to increased interest rates (due to inventory holding cost of around Rs 3 per litre), higher late fee due to letter of credit confirmation fee and higher turnover tax (0.5 per cent) etc.
The oil body informed that based on the decision taken by the Economic Coordination Committee (ECC) on October 31, 2022, the margin for HSD and MOGAS has been revised to Rs 6/litre during the current year; However, this is insufficient and needs to be reviewed urgently.
