Petroleum dealers strike call triggers panic buying
There were fears that the petroleum dealers, most of whom were corrupt and involved in fuel hoarding, would not pass on the full benefit of cross-subsidy to the motorbike owners and demand higher prices. PHOTO: afp
Financially-stressed commuters rushed to petrol pumps across the country and formed long queues on Thursday in an attempt to get their vehicle-tanks refilled ahead of a daylong shutter-down strike called by fuel stations for Friday (today).
The strike by the owners of around 13,000 fuel stations nationwide was set to start from 6am. Abdul Sami Khan, the chairman of the Pakistan Petroleum Dealers Association (PPDA), told The Express Tribune that the strike might be extended beyond one day.
“The petroleum dealers will review the situation [the government response] at around 2-2:30pm and develop a future strategy to convince the government to withdraw 0.5% advance turnover tax imposed on the dealers in the budget 2024-25 that came into effect from July 1, 2024,” he said.
The tax-heavy budget is hitting the people from all sides, making their lives very difficult. In addition to this, the petroleum dealers strike is also playing havoc with them, as they were running from pillar to post in search of the fuel needed to attend offices and their indoor and outdoor activities today.
Those who would bear the brunt of the strike, include the bike-riders, having jobs to deliver food and parcels door-to-door, the logistic firms running heavy delivery trucks and mobiles, and the ambulance operators.
Earlier on Tuesday, the PPDA held negotiations with the government representatives, including Finance Minister Muhammad Aurangzeb and high officials of the Federal Board of Revenue (FBR) and the Oil and Gas Regulatory Authority (Ogra) for the withdrawal of the 0.5% advance turnover tax on the fuel sales.
The meeting, however, ended inconclusive, while the communication between the two sides remained disconnected since then. Trying to clarify his positions, Sami Khan dismissed the notion the strike call was playing havoc with commuters.
He said that the PPDA had given the strike call two days ago to avoid any hassle. Before that, he added, “we issued a warning” to the government about the strike. “Some of the petrol pumps went out of the fuel in the day,” he explained. “The government is not ready to understand the grim situation.”
Making some rough calculations, Khan said, a dealer selling 8,000 to 10,000 litre fuel in a day would end up paying an additional cost of Rs700,000-800,000 per month on account of the advance tax. “This will be around Rs10 million a year for the dealer,” he estimated.
This much tax, he continued, would make the fuel selling business unsustainable, as “the dealers are already receiving low profit margins of a net Rs3 per litre after paying different cost on the sales.” The government is paying a profit margin of Rss8.64 per litre on petrol and diesel.
To recall, the government increased diesel price by Rs9.56 per litre to Rs277.45 per litre from July 1 for the first half of the ongoing month under its fortnightly exercise. It also increased the petrol price by Rs7.45 per litre.
In Islamabad, the Petroleum Division and Ogra said in a joint statement that “all oil marketing companies have been directed to ensure ample supply of petroleum products at petrol pumps and keep them open”. The statement added that petroleum products would be available across the country