In a bold move to seek justice for their decreasing profit margins amid soaring inflation, the Pakistan Petroleum Dealers Association (PPDA) has announced a nationwide strike on July 22, 2023. With nearly 10,000 members standing united, the association plans to shut down all petrol pumps across the country at 6 pm on the designated day. The important side note is that company-operated outlets will still remain open.

PPDA criticizes the authorities for failing to respond to its legitimate demands after pointing the finger at the petroleum ministry. Abdul Sami Khan, the spokesperson for the association, asserted that the association has made multiple attempts to get in touch with the minister of state for petroleum to address these concerns. Still, they have not received any response thus far.

Emphasizing the gravity of the matter, Abdul Sami pointed out that the licenses of 20 dealers have been revoked due to the sale of Iranian petrol. While acknowledging the presence of dishonest elements within the association, he highlighted that the Balochistan chief minister has openly acknowledged that the petrol being sold originates from neighboring Iran.

As fuel pump operators face an economic downturn, they believe that increased interest rates and inflation have hurt their businesses. To counter the crippling impact, they are calling for an increase in the dealership margin.

The PPDA highlights a pressing concern—sales have plummeted by 30% due to the rampant smuggling of Iranian fuel into the country. This illicit practice jeopardizes the fuel industry and puts immense pressure on legitimate players to sustain their operations.

Pakistan grapples with an economic crisis amid a weakening currency and prolonged inflationary pressures. With the national inflation rate reaching a staggering 29.4% in June, it’s no wonder that the fuel industry is feeling the brunt of this financial burden.

Previous Demands of PPDA

Earlier in May, the oil industry urged for a Rs. 12/liter margin on high-speed diesel (HSD) and petrol for oil marketing companies (OMCs). Rising operational costs have put these companies in a precarious position, causing financial hardships that demand immediate attention.

The oil industry has been grappling with multiple challenges, including surging international fuel prices, exchange rate fluctuations, increased interest rates, higher demurrages, and a hefty turnover tax. These factors have compounded the woes of fuel pump operators, prompting the urgent need for a thorough review of the current situation.

While the margin for HSD and petrol was revised to Rs. 6/liter based on a decision by the Economic Coordination Committee in October 2022, the PPDA believes it falls short of addressing the critical issues. Urgent government intervention is required to find a viable solution that can stabilize the fuel industry and provide some much-needed relief to its operators.

As the PPDA takes a stand for its members and the fuel industry at large, the strike on July 22 underscores the severity of their grievances.