The Pakistan Petroleum Dealers Association (PPDA) ordered a statewide petrol pump shutdown on July 22 in order to seek higher profit margins amid an ongoing inflation problem.
The nearly 10,000-member association announced that all petrol pumps in Pakistan would close at 6 p.m. on July 22. They claim to have previously expressed their concerns to the petroleum minister, but their requests were turned down.
The association stated in its statement that rising interest rates and inflation have had a significant influence on the businesses of gasoline operators, pushing for a rise in the dealership margin. They further stated that smuggled Iranian petroleum into the nation has reduced sales by 30%.
According to Abdul Sami Khan, chairman of the group, around 8,000-9,000 operators will participate in the July 22 shutdown. The association stressed that the supply of petrol will be halted unless their requests are met.
Pakistan is dealing with a collapsing currency and skyrocketing inflation rates, which reached 29.4% in June, down from a record high of 38% in May.
Due to the high cost of doing business, Pakistan’s oil sector proposed a rise of Rs12/liter margin on high-speed diesel (HSD) and petrol (Mogas) for oil marketing companies (OMCs) in May.
In the April 30, 2022 petroleum review, the OMCs’ margin on HSD was Rs6.50/liter and Rs6/liter on Mogas. Furthermore, sellers charged a Rs7/liter profit on both HSD and Mogas.
Since the previous year, the oil industry has faced significant challenges due to increased international fuel prices, exchange rate fluctuations, higher interest rates resulting in inventory holding costs, credit letter confirmation charges resulting in higher demurrages, and a high turnover tax (0.5 percent).