The All Pakistan Petrol Pumps Owners Association (APPPOA) on Tuesday announced a nationwide shutdown of petrol pumps from midnight Wednesday (today), after failure to achieve consensus during negotiations with the government over the daily pricing mechanism for petroleum products.
APPPOA General Secretary Nauman Butt told journalists his group had rejected the government’s daily fuel pricing mechanism and would close petrol pumps across the country in protest until its reversal. “We cannot accept daily changes in petroleum product prices under any circumstances,” he said, confirming talks between the APPPOA and Petroleum Minister Ali Pervaiz Malik failed to produce any breakthrough.
However, there appeared to be some division over the strike, as the Pakistan Petroleum Dealers Association (PPDA) said it would decide on Wednesday whether it would join the strike. The group has said OGRA has sought seven days to present dealers’ concerns to the government and provide a comprehensive response. Thus far, pumps in Punjab and Khyber-Pakhtunkhwa are set to go on strike from Wednesday night, while those in Sindh and Balochistan are willing to give the government a chance to respond.
Key among the petroleum dealers’ concerns is the impact of the daily pricing on their profit margins. Dealers in the country have often resorted to hoarding in anticipation of price hikes, earning hefty profits at the cost of the consumer. The daily mechanism reduces the potential of this, though many pumps are continuing to halt sales as midnight approaches to benefit from the daily price hikes seen since the new system was implement.
Last week, the minister announced the country was shifting to a daily pricing mechanism for petroleum products, with the Oil and Gas Regulatory Authority (OGRA) to post daily updates on its website to ensure transparency and allow the immediate impact of international price fluctuations to be passed on to consumers. The pricing formula is based on a seven-day weekly average of international market prices to align with international standards, according to Malik.
New prices
Amidst the standoff between the dealers and the government, OGRA on Tuesday hiked the price of high-speed diesel by Rs. 7.15/liter to Rs. 367.21/liter and petrol by Rs. 4.93/liter to Rs. 320.73/liter. The revised prices took effect on July 22 and would remain in place until July 23.