Pakistan Petroleum Dealers Association (PPDA) declared a countrywide gasoline pump shutdown on July 22.
PPDA’s protest highlights the demand for higher profit margins amid the crippling inflation crisis. The association, boasting over 10,000 members, expressed disappointment in the petroleum minister’s lack of response to their concerns.
The official statement issued by the association shed light on the toll inflation and increased interest rates have taken on businesses. They’ve demanded a hike in the dealership margin, stating that the recent economic circumstances have negatively impacted the operators. Furthermore, the menace of smuggled Iranian fuel penetrating the market has resulted in a reported loss of 30% in sales.
Abdul Sami Khan, the association’s chairman, confirmed in an interview with Reuters that a significant number of operators, estimated to be between 8,000 and 9,000, are set to cease operations on the proposed date.
Economic Struggles Affecting the Fuel Industry
Pakistan’s financial scenario, characterized by a depreciating currency and prolonged inflation, paints a bleak picture. The national inflation rate peaked at a staggering 38.0% in May, which showed a slight dip to 29.4% in June.
The economic crunch has led the country’s oil industry to request a higher margin on high-speed diesel (HSD) and Mogas (petrol) to combat the increased cost of doing business, resulting in significant financial troubles.
According to the petroleum review conducted on April 30, 2022, the existing margins stand at Rs6.50/litre on HSD and Rs6/litre on Mogas, with dealers adding Rs7/litre to the prices.
The energy sector has been grappling with problems ranging from soaring international fuel prices, fluctuating exchange rates, rising interest rates resulting in inventory holding costs, and more. The oil body has stressed that the current margins, as per the Economic Coordination Committee’s (ECC) decision dated October 31, 2022, are insufficient and require an immediate review.
 announces a nationwide shutdown of gasoline pumps in response to increasing inflation rates and demand for higher profit margins. The shutdown is set to commence on July 22 and will continue until demands are addressed){kind=link}