Panic as petroleum dealers go on strike

Demand doubling their profit margin to 6%

ISLAMABAD/ LAHORE ':

Panic gripped cities across the country on Wednesday as petroleum dealers were all set to go on a nationwide strike for an indefinite period starting today (Thursday) in protest against low profit margin while the Petroleum Division said that it had moved a summary to the Economic Coordination Committee of the Cabinet (ECC) recommending an increase in the dealers’ share.

The division said that the federal cabinet would likely take a decision within the next 10 days, as the dealers are demanding an increase up to six per cent from the current three per cent in their margin.

A day earlier, the Pakistan Institute of Development Economics (PIDE) also suggested the ECC to increase the margin of petroleum dealers.

The Punjab government has asked the energy ministry to resolve the issue by holding talks with leaders of the Pakistan Petroleum Dealers Association (PPDA).

According to the Petroleum Division, petrol stations owned by Oil Marketing Companies (OMCs) including Pakistan State Oil (PSO), Shell Pakistan, Total and Hascol will remain open on Thursday.

Hascol would like to inform and assure its esteemed patrons and customers that all Hascol Company Owned & Company Operated (COCO) stations, including all service stations on the M2 Lahore-Islamabad Motorway will remain open and ready to serve them as per routine. #HascolCares pic.twitter.com/hCqjBVnE6M

— Hascol Petroleum Limited (@HascolLimited) November 24, 2021

However, most petrol pumps in Karachi ran short of petrol Wednesday evening, causing severe hardships for commuters while in other cities, two and four wheelers could be seen in long queues at different petrol pumps.

PPDA Secretary Noman Butt said around 8,000 petrol stations across the country, including Gilgit-Baltistan and Azad Jammu and Kashmir, will close at 6am from Thursday for an indefinite period.

Read more: Countrywide petrol strike on Nov 25

“We are engaged with the Petroleum Division secretary, however, the government has yet to notify the upward revision in the profit margin of dealers,” he said, adding that they will not call off the strike till the issuance of an official notification.

Previously, he said, the Petroleum Division had ignored their demands, adding that they would not hold talks with the authorities till their profit margin was increased.

Addressing a news conference in Lahore on Wednesday, PPDA Information Secretary Khawaja Atif said that the government had left them no option but to close down their business as circumstances were not favourable.

“A recent study conducted by the government estimated that operational expenditures of petrol stations were Rs4.03 per litre and the government is giving Rs3.91 commission per litre on papers,” he said. “In fact, after deductions by the OMCs, Ogra, and petroleum ministry, dealers hardly get Rs3.01 per litre which is even less than our operational expenditures,” he maintained.

To a question during the conference, the PPDA office-bearers said: “We have decided to go on strike for an indefinite period. No petrol station will resume operation till acceptance of our demand as low-profit margin has made this business unviable.”

Also read: ECC may raise oil margins by up to 25%

The PPDA representatives disclosed that in every city 15-20% petrol stations are being run by the OMCs which would remain operational but they would be insufficient to cater to the huge demand. Atif pointed out that there were around 375 petrol stations supplying over three million litres of petrol daily. “A few dozen petrol stations cannot cater to this huge demand and will run out of fuel in a couple of hours.”

The information secretary said, “Earlier, we announced going on a strike from November 5 but Energy Minister Hammad Azhar had promised us to take up our issue in the ECC meeting. He sought 10-day time which lapsed on November 15. We waited for the government for 20 days. Now, the minister tweeted that the dealers’ commission has been settled, but it has not.”

The energy minister tweeted, “We are in touch with the PPDA. A summary regarding revision in their margin has already been tabled in the ECC and a decision will be taken in its next session.”

Meanwhile, the division said that oil tankers were dispatched to various regions to cater to the shortage of petrol, while all associations related to the oil sector had expressed their satisfaction over the arrangements made by the federal government.

In a letter written to the Petroleum Division, the Punjab government asked the federal government to resolve the issue.

“It has been reported by an intelligence agency that the PPDA is poised to observe a countrywide strike on November 25 over alleged government’s reluctance in increasing the dealers’ margin to 6%,” the letter stated. “The federal government may engage leaders of Petroleum Dealers Association into meaningful dialogue to resolve the subject issue.”

In a statement, Oil and Gas Regulatory Authority (OGRA) spokesperson said that the authority has taken serious notice of people/entities who are trying to disrupt oil supplies on the pretext of increase in dealers’ margin.

“All OMCs have been advised to ensure uninterrupted oil supplies at the retail outlets and Ogra enforcement teams are infield to ensure the same. Anyone involved in oil disruptions causing public inconvenience shall be dealt strictly in accordance with Ogra laws,” he added.