KARACHI – The Pakistan Petroleum Dealers Association (PPDA) on Thursday declared a nationwide shutdown of fuel pumps on July 22, demanding an increase in profit margins amidst an ongoing inflation crisis.
The association, representing over 10,000 members, announced that all petrol pumps in Pakistan would close at 6 pm on July 22. They claim to have previously communicated their concerns to the petroleum minister, but their pleas were ignored.
In their statement, the association highlighted that high interest rates and inflation have severely impacted the businesses of fuel operators, urging for an increase in the dealership margin. They also mentioned that sales have dropped by 30% due to the smuggling of Iranian fuel into the country.
Chairman of the association, Abdul Sami Khan, informed Reuters that approximately 8,000-9,000 operators represented by them will participate in the shutdown on July 22. The association emphasized that the supply of petrol will remain suspended until their demands are met.
Pakistan is grappling with a weakening currency and soaring inflation rates, reaching 29.4% in June, though it had slightly decreased from a record high of 38% in May.
In May, Pakistan’s oil industry had requested an increase of Rs12/liter margin on high-speed diesel (HSD) and petrol (Mogas) for oil marketing companies (OMCs) due to the high cost of doing business, which caused financial hardships.
The OMCs’ margin on HSD was Rs6.50/liter, and Rs6/liter on Mogas in the April 30, 2022 petroleum review. Additionally, dealers were charging Rs7/liter margin on both HSD and Mogas.
The oil industry has been facing significant challenges since the previous year due to increased fuel prices in the international market, exchange rate fluctuations, higher interest rates resulting in inventory holding costs, credit letter confirmation charges leading to higher demurrages, and a high turnover tax (0.5 percent).
