The Pakistan Petroleum Dealers Association (PPDA) on Thursday warned it would “indefinitely” shut down fuel pumps nationwide from July 22 to protest the government’s reluctance to increase their profit margins amidst inflationary pressures.
“We will shut down all petrol pumps across Pakistan on July 22, from 6 p.m.,” said the PPDA, which claims to represent around 10,000 fuel pumps. In a statement, it said the petroleum minister had been informed of their concerns but had not acted to address them. It further alleged that spiking interest rates and inflation had impacted their businesses, hampering their profitability in the absence of an increase to their margins.
The organization claimed sales had declined by 30 percent in some areas due to the smuggling of cheaper Iranian fuel. Addressing a press conference at the Karachi Press Club, PPDA Chairman Samiullah Khan said the government had repeatedly refused to raise their profit margin to 5 percent on the sale of petrol and diesel. Currently, the profit margin is fixed at Rs. 6/liter, which comes to roughly 2.4% at the prevailing fuel prices.
A member of the association noted that profit margins had earlier been set in percentage terms, which adjusted with fuel prices. However, they lamented, the incumbent government had retained the Rs. 6/liter margin set over a decade ago, while promising to set it at 5 percent subsequently. These assurances never materialized, they regretted, leaving many dealers with negative profit margins.
According to the PPDA chairman, another factor in the reduced profits is the record-high inflation, which has reduced consumption and further impacted revenue generation. Data provided by the government shows the demand for petroleum oil products plunged to a 17-year low of 16.61 million tons in the last fiscal year, a 27% year-on-year decline.