Fuel stations strike called off after deal

Strikers mentioned plans to strike back with better plan to convince the government

KARACHI:

The petroleum dealers on Friday announced that they were not extending their nationwide strike calling for the closure of fuel stations beyond the day “for the time being”, saying they would strike back with a better plan to convince the government to withdraw the 0.5% advance turnover tax imposed on the sale of their products in the new budget while the Federal Board of Revenue (FBR) clarified late in the night that they were exempt from it.

The FBR in an office memorandum wrote that the dealers and retailers of oil marketing companies (OMCs) were not subject to Section 263h of the Income Tax Ordinance, 2001.

The daylong closure of fuel stations was partially successful after the Pakistan Petroleum Dealers Association (PPDA) was divided on Thursday over whether the shutter-down was the best option to have their demand accepted or not.

The government-run buses including the Peoples Bus Service in Karachi continued to ply the roads, while privately-operated coaches and vans were found in low numbers in the port city.

The government through the Oil and Gas Regulatory Authority (Ogra) asked the OMCs to provide fuel in substantial quantities to the pumps including the ones operated by the state-run Pakistan State Oil (PSO) and others to neutralise the impact of the strike.

However, the commuters faced great difficulties while searching for fuel on Thursday night and Friday in many residential and commercial areas of the city.

Only the fuel stations including the ones run by the OMCs remained opened in certain localities of Karachi including Sharea Faisal, II Chundrigar Road, and Clifton as well as other parts of the country.

However, most fuel pumps in Lahore remained operational.

In Punjab’s provincial capital, out of around 350 fuel stations in the city, only about 150 remained closed.

The PPDA was divided into two factions in Lahore – the Sami and Khawaja Atif groups.

The Sami group observed the strike while the other kept fuel stations open.

However, the residents of the areas where the fuel stations remained shut faced immense problems.

Mohammad Khan, a fuel station owner in Khyber-Pakhtunkhwa’s Dera Ismail Khan, said they were not participating in the strike because they were not taken into confidence over this decision.

“We also have demands that the union should have looked into, but they did not,” he added.

While addressing a news conference in Karachi at the conclusion of the association’s emergency meeting held in the evening, PPDA Chairman Abdul Sami Khan said they were calling off their strike but would not sit idle.

He warned that the petroleum dealers would surround Islamabad if their demand for the withdrawal of the tax was not accepted.

The PPDA chairman explained that the tax was an additional cost on the dealers, who were already supplying fuel to the stations at low profit margins.

He continued that the new tax would burden each dealer with an additional cost of Rs800,000 to 100,000 per month on an average.

There are some 13,000 dealers in Pakistan.

“We do not accept the tax at all,” he said, adding that it would make the oil sales business unsustainable.

He feared that the newly imposed tax would encourage the sale of smuggled fuel in the country, attributing the situation to the government’s “double taxation” policies.

The PPDA chief clarified that they had not called off the strike but taking a pause for the time being to come up with better ideas to have their demand accepted.

“We made this decision immediately because of foreign and local tourists stranded in the northern areas including Hazara, Malakand and Swat,” he maintained.

“Our one-day strike has been successful, but people are suffering because motorbikes can’t run.”

During the meeting, the PPDA chairman highlighted that no negotiations had taken place with the government so far.

He pointed out that around 525 fuel stations were present in Karachi, with only company-operated or company-dealer ones remaining open.

“Karachi typically sees daily sales of 3.5 to 4 million litres of petrol and diesel,” he added.

He told Reuters that there was a nationwide strike by dealers and fuel stations were shut in every city except Islamabad and Rawalpindi.

(With input from our correspondent in Lahore and Reuters)