ISLAMABAD: The Pakistan Petroleum Dealers Association (PPDA) has announced a nationwide shutdown of petrol stations on Friday following the breakdown of negotiations with the government regarding the advance tax issue.
Abdul Sami Khan, Chairman of the PPDA, expressed disappointment after the talks in Islamabad failed to yield any results. “Despite our discussions, the government has not addressed our concerns, compelling us to proceed with the previously announced strike,” Khan stated.
The bone of contention is the advance income tax introduced in the fiscal year 2024-25 budget, which the PPDA claims will devastate the petrol pump business, already suffering from thin profit margins amid high inflation. “The imposition of an additional 0.5% tax on turnover, when every transaction cost is already taxed at the purchase stage, makes it financially unfeasible to continue operations,” Khan explained.
During a press conference on Tuesday, Khan reiterated that the petroleum sector should not be treated like other sectors due to its specific challenges, including high operational costs and low profitability. He warned that the continuation of such policies could lead to widespread closures of fuel stations.
Khan also brought up the issue of oil smuggling from Iran, criticizing the government’s inaction. “We have repeatedly raised this issue with the authorities, but there has been no meaningful response. It’s imperative for the government to negotiate with Iran and regulate this through taxation to curb smuggling,” he added.
The PPDA has urged the government to remove the contentious tax clause from the finance bill as soon as possible to avert a crisis in the petroleum distribution sector.
