Petrol dealers call off nationwide strike after talks with govt

Published November 25, 2021
People on motorcycles wait for their turn to get petrol at a petrol station, after Pakistan Petroleum Dealers Association (PPDA) announced a countrywide strike, in Karachi, on Thursday. — Reuters
People on motorcycles wait for their turn to get petrol at a petrol station, after Pakistan Petroleum Dealers Association (PPDA) announced a countrywide strike, in Karachi, on Thursday. — Reuters
A view of a closed petrol station in Peshawar. — Photo by Sirajuddin
A view of a closed petrol station in Peshawar. — Photo by Sirajuddin

The All Pakistan Petrol Pumps Dealers Association on Thursday called off a nationwide strike against the government's failure to increase their profit margin.

The government and the association's chairman, Abdul Sami Khan, reached the agreement after holding day-long negotiations. Adviser to the Prime Minister on Finance Shaukat Tarin, Energy Minister Hammad Azhar and Petroleum Secretary Dr Arshad Mahmood were part of the government team.

Speaking to Dawn, association spokesperson Jahanzaib Malik confirmed that petroleum dealers had called off the nationwide strike. He said that they had initially demanded a six per cent increase in their profit margin, but the government had agreed to a 4.4pc increase.

Malik said that petrol dealers were charging Rs3.91 per litre and would now charge Rs4.90. He said that the price of petrol would be increased after the government announced the rates for next month.

He said that agreement would be implemented from next month, adding that the government had vowed to review the profit margin after some time.

Information Minister Fawad Chaudhry also shared the development in a tweet.

Meanwhile, a handout issued by the Petroleum Division (PD) stated that all stakeholders appreciated the division's proposal for enhancement of 99 paisas in the existing margin of petrol and 83 paisas in the existing margin of high speed diesel.

"The proposal for a 25pc increase in the margin of dealers will cover all delays in the revision of margin in the past and would also help dealers in mitigating the impact of inflation. The PD has assured that it will put all its endeavours to defend the said proposal [...] before the ECC and the federal cabinet so that this historic relief to petroleum dealers in the shape of sizeable enhancement in their margins becomes a reality," the statement said.

It added that all parties clearly understood that passing on extra costs to the general public was not viable.

"The PD assured the association that after six months (during June 2022) margins will be readjusted according to the level of inflation prevalent at the time. The association suggested that in the subsequent adjustment the margins may be fixed in percentage terms and the petroleum division will put its best efforts to obtain approval of the competent forum, for revision of dealers’ margin up to 4.40pc of the selling price excluding dealers’ margin.

"While agreeing with the association's proposal in principle, the PD will make its best efforts to get it approved through the competent forum," the statement said.

"This arrangement of enhancing margin presently by 25pc and subsequent readjustment after six months will ensure safety and security of the business of petroleum dealers without passing the extra burden to the general public," the statement concluded.

'Legitimate demands will be accepted'

Earlier today, Energy Minister Hammad Azhar told petrol dealers that legitimate demands will be accepted but warned that those seeking a nine-rupee raise will be disappointed.

Azhar said that he was aware of the problems being faced by petrol pump owners as he reminded them that a summary for an increase in their profit margin was already with the Economic Coordination Committee (ECC) and the matter would be resolved in the next meeting.

The minister urged the dealers to reconsider their strike based on the inconvenience being faced by the general public. However, he made it clear that the government would not accept any illegitimate demands.

"Some groups want to use this strike to have a raise of nine rupees," said the minister. "A nine-rupee raise cannot be granted just to benefit a few companies."

"Legitimate demands will be accepted, illegitimate ones will be not," the minister declared.

Situation across the country

Privately-owned petrol stations ceased operations across the country today in pursuance of the strike call, although state-owned stations of Pakistan State Oil (PSO) and a few other companies including Shell and Hascol were still operational, according to the Ministry of Energy.

In Peshawar, some PSO stations were open, while a vast majority were closed. Long queues had formed outside the select few that were still operational.

According to President Balochistan Petroleum Association Qayyumuddin, all petrol stations would remain closed till the demands of the dealers are met.

Meanwhile, Deputy Commissioner Lahore Umer Sher Chatha said 62 petrol stations of different companies, including the PSO, were open for motorists across the city.

Oil and Gas Regulatory Authority (Ogra) spokesperson Imran Ghaznavi said the authority was in touch with oil marketing companies to ensure uninterrupted supply of petroleum products.

"Ogra teams are in touch with stakeholders and engaged in smooth supplies," he tweeted.

PPDA announces strike

The Pakistan Petroleum Dealers Association (PPDA) had earlier this week announced that all petrol stations across the country would remain closed on Nov 25 (today) against what they called the government's alleged backtracking on its promise to raise petroleum commission.

However, the handout issued by the association did not mention when the strike will end. When Dawn.com contacted PPDA Chairman Abdul Sami Khan for clarity on the matter, he refused to give a definitive answer and said that a final decision will be taken today.

According to the PPDA handout, a meeting of petrol dealers was held at Faletti's Hotel in Lahore on Saturday, where it was noted that the government had promised to raise the dealers' profit margin three years ago.

"The promise remains unfulfilled to date ... [and] now, because of [growing] inflation and increase in the prices of petroleum products, it has become difficult for dealers to run fuel stations," the press release read.

It added that the dealers had previously given the call for a strike from November 5 but had withdrawn it after after a government team, led by Minister for Energy Hammad Azhar, held a meeting with them on November 3 and agreed to fulfil their demands.

According to a Dawn report, the meeting had also constituted a committee led by Petroleum Secretary Dr Arshad Mahmood and comprising stakeholders to ensure the implementation of the agreement for the increase in margins through approval from the ECC and the federal cabinet by November 15.

In that meeting, the press release said, "the government had agreed to raise the profit margin by six per cent and sought time till November 17 to implement the decision".

"Dealers continued the supply of petroleum products in public interest, but five days have passed since the agreed date of November 17 and the government representatives don't seem serious," the statement said.

Govt says petrol will be available at all major outlets

On the other hand, a spokesperson for the petroleum ministry had last night said that it had sent a summary to increase dealers' profit margin to the ECC and was awaiting approval.

He said that the ministry was working on increasing the profit margin of oil marketing companies and dealers, adding that the federal cabinet would take a decision in this regard within ten days.

"Fuel will be available at all Pakistan State Oil (PSO), Shell and Total stations in country,” he said, adding that oil tankers had been sent to these stations.

The Ministry of Energy added that petrol products will be available at PSO, Gas and Oil Pakistan Limited, Hascol and Shell's "company-operated" pumps.

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