News
July 21, 2023
Pakistan Fuel Pump Operator Association Calls Nationwide Strike on July 22
Karachi: Fuel pump operators across Pakistan are to hold a nationwide strike on July 22 in a bid to secure larger margins amid an inflation crisis, the Pakistan Petroleum Dealers Association said on Thursday.
"We will shut down all petrol pumps across Pakistan on July 22, 6 p.m.," said the association, which says it has more than 10,000 members.
In a statement it 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 country 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. - Reuters
The News adds: Earlier in May, Pakistan’s oil industry had sought Rs12/liter margin on high speed diesel (HSD) and Mogas (petrol) for oil marketing companies (OMCs) in view of the high cost of doing business, which had created financial hardships.
On April 30, 2022, petroleum review, the OMCs margin on HSD was Rs6.50/liter whereas it was Rs6/liter on Mogas. Apart from the OMCs’ margin, dealers were charging Rs7/liter margin on HSD and Mogas,
The oil industry has been facing severe challenges since last year because of 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/liter), credit letter confirmation charges leading to higher demurrages, and high turnover tax (0.5 percent) etc.
The oil body pointed out that the margin for HSD and Mogas has been revised to Rs6/liter 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.