Pak Petroleum Dealers Threaten to Shut Down Fuel Stations

Petroleum dealers in Pakistan have threatened to shut down fuel stations across the country for an indefinite period from Saturday onwards if the government fails to honour its commitment of increasing their profit margins.

In a statement, the Pakistan Petroleum Dealers Association (PPDA) said they were being forced to protest against the government’s failure to fulfill its commitment of a 5 per cent increase on the sale of petrol and diesel.

According to the the government commitment, a 5 per cent profit margin would increase the per litre profit from 6 PKR (2.4 per cent) to 12 PKR (5 per cent) on the prevailing prices of petrol and diesel.

A dealer said that Minister of State (Petroleum Division) Musadik Malik has contacted the PPDA and pledged to hold a meeting in Karachi over the issue.

"But if no meeting takes place of if there was no satisfactory outcome, the strike will continue, except on the two days of Muharram to ensure religious events are not affected," the dealer said.

At the moment, the government is working on a fortnightly rescheduling of prices of petroleum products.

According to the latest working effective since July 16, the profit margin of dealers stands at 7 PKR per litre instead of 6 PKR per litre.

However, the dealers have demanded the 5 per cent hike, which will bring in a profit of 12 PKR per litre.

“We are not demanding anything out of the blue. This was a commitment made to us by the government after it assumed power in April 2022,” another dealer said.

“Since then, we have been trying to meet with Malik and have faced indifference in response. This has further exacerbated our frustration."

The cash-strapped nation is currently undergoing an economic crisis, in which, cost of doing business has become high and inconsistent, offsetting the profit margins of many dealers.

With the current government's tenure coming to an end soon, the delay in fulfilling the commitment with the petroleum association has left them with uncertainty

“We have legitimate concerns over the government’s commitment. And now, we are also unsure about its fulfillment because the government tenure is ending,” said Malik Khuda Baksh, a petroleum dealer from Karachi.

“The fear is that they may remain in limbo for another three to six months during the caretaker setup and until the next government takes office."

Another major issue concerning the government besides the PPDA's demand is of smuggled petroleum products from Iran, especially diesel, whose sale in the local market has affected the dealers with at least 30 per cent reduction of trading.

“With the current margins, it has become nearly impossible for filling stations to operate efficiently,” Baksh added.

Pakistan has at least 12,000 filling stations and at least 10,000 of them are part of the PPDA.