— State minister Musadik Malik convinces PPDA to defer protest for two days
— While long queues seen at petrol pumps, LPG sellers give protest call
ISLAMABAD: While the federal government was able to convince Pakistan Petroleum Dealers Association (PPDA) to delay its strike for two days, the LPG dealers announced to observe strike across country.
PPDA deferred strike to shut fuel pumps across the country for two days following successful negotiations with State Minister for Petroleum Musadik Malik, who arrived in Karachi earlier Friday in a bid to convince the PPDA to call off the nationwide strike.
While long queues seen at petrol pumps on Saturday due to the strike call given by the PPDA and the deferment of the strike call even failed to convince people not to buy fuel.
In a statement, the PPDA said they might hold another round of negotiations with the government after two days.
A day earlier, the PPDA announced shutting down fuel pumps across the country from July 22, demanding an increase in profit margins amid an inflation crisis.
“We will shut down all petrol pumps across Pakistan on July 22, 6pm,” said the association, which further says it has more than 10,000 members.
In a statement, the association said the petroleum minister was informed about their concerns but to no avail.
The official communique said interest rates and inflation have hit operators’ businesses and called for the dealership margin to be increased.
It said sales have slumped by 30% due to Iranian fuel being smuggled into the country.
“Around 8,000-9,000 (operators) … represented by us, will be shut on July 22,” Abdul Sami Khan, chairman of the association, told Reuters.
The association said the supply of petrol will remain suspended until the demands are met.
Pakistan is dealing with a weakening currency and a prolonged period of inflation with the national rate hitting 29.4% in June, down from a record high of 38% in May.
Earlier in May, Pakistan’s oil industry had sought Rs12/litre 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 hardships.
On April 30, 2022 petroleum review, the OMCs margin on HSD was Rs6.50/litre whereas it was Rs6/litre on Mogas. Apart from the OMCs’ margin, dealers were charging Rs7/litre margin on HSD and Mogas
The oil industry has been facing severe challenges since last year because of the increased cost of doing business. The reasons vary from increased fuel prices in the international market and exchange rate to increased interest rates (leading to inventory holding cost of around Rs3/litre), credit letter confirmation charges leading to higher demurrages, and high turnover tax (0.5 per cent) etc.
The oil body pointed out that the margin for HSD and Mogas has been revised to Rs6/litre during the current year based on the decision taken by the Economic Coordination Committee (ECC) dated October 31, 2022; however, the same is insufficient and needs to be reviewed urgently.
He added that LPG is not being sold anywhere in the country at the fixed official price, adding that due to black marketeering, the gas is being sold at higher prices.
Khokhar also added that the price per kg is Rs178, but LPG is being sold at Rs220 to Rs350 per kg, while the local gas company is selling LPG at a price of Rs100,000, which is more than the fixed price per ton.
The chairman added that the annual consumption of LPG is 1.8 million tons, 40% of which is met by local production.
The announcement comes just a day after petroleum dealers in Pakistan issued a warning to close down filling stations across the country indefinitely, starting from July 22 morning.
The decision came after the outgoing government failed to honour its commitment to increasing profit margins of the dealers, leaving them dissatisfied with the current situation.
Speaking at a press conference held at the Karachi Press Club, Pakistan Petroleum Dealers Association (PPDA) Chairman Samiullah Khan expressed their frustration over the government’s inability to raise their profit margin to 5% on the sale of two major petroleum products.
Currently fixed at Rs6 per litre (2.4%), the 5% margin would amount to over Rs12 per litre given the prevailing petrol and diesel prices of Rs253/litre and Rs253.50/litre, respectively.
