- Interest rates, inflation have affected the business of operators: PPDA.
- The association says that on July 22, 8,000-9,000 operators will remain closed.
- “Petrol supply will remain suspended till the demands are met.”
The Pakistan Petroleum Dealers Association (PPDA) on Thursday announced the closure 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 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.
“Around 8,000-9,000 (operators) represented by us will remain closed on July 22,” said Abdul Sami Khan, president of the association. 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. Reasons for this range from increased fuel prices and exchange rate in the international market to increased interest rates (causing 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.