Nationwide Strike of Petroleum Dealers
In a significant development, Pakistan Petroleum Dealers Association (PPDA) announced an indefinite countrywide strike set to begin on Saturday, July 22. The dealers are citing various economic factors as reasons for their protest and demanding an increase in their profit margin from the current level of 2.4% to 5%.
The PPDA, which represents over 10,000 contributors and operates a giant network of 12,000 petrol stations throughout the country, expressed dissatisfaction with the government's handling of their profit margins. In a press release, the association's chairman, Abdul Sami Khan, highlighted the challenges they are facing due to rising costs. A copy of this press release is attached below.
The consumer price index has surged to 38%, and simultaneously, electricity and other utility rates have also spiked, mainly influenced by the Kibor rate. These economic factors have significantly impacted the dealer's commission on petrol, causing it to virtually disappear.
The situation has become even more complex as smuggled Iranian petrol and diesel are being sold freely, causing a considerable decline in sales for legitimate dealers. This illegal activity has resulted in a sharp drop of at least 30% in their overall sales.
To understand the timeline better, in 1999, an agreement was reached, ensuring a 5% profit margin for petroleum dealers. However, in 2004, this margin was reduced to 4%, leaving the dealers disappointed but continuing to operate. The situation worsened when the incumbent government decided to fix the profit margin at Rs6 per liter, resulting in a paltry 2.4% profit for the dealers, which they find unacceptable.
Despite attempts to address their concerns, the government failed to take meaningful actions. The dealers had reached out to state minister Musadik Malik and published their appeals in prominent newspapers, but no significant steps were taken in response. The government promised to revisit the issue later, but the deteriorating economic conditions, including increasing electricity, utilities, labor costs, and the Kibor rate, made it impossible for small petrol pumps to sustain their businesses.
In light of these issues, the PPDA has decided to take drastic action by declaring a countrywide strike, effectively closing all petrol pumps across the nation from 6 a.m. on July 22. The strike will persist until the government addresses its demands and takes concrete measures to ensure a fair profit margin for petroleum dealers.
This strike action is probably to have massive implications for the public because the closure of petrol stations could disrupt transportation. That will have an effect on corporations, and inconvenience residents who rely on personal motors/vehicles for their daily commutes. Moreover, the closure of petrol pumps might lead to long queues and scarcity of fuel, causing further disruptions in the already challenging economic climate.
However, It remains to be seen how the authorities will reply to the needs of the PPDA. And whether negotiations can result in a decision that is acceptable to both parties or not. Until then, the strike can be continued indefinitely, leaving a lot of people anxious about its potential impact on the country's economy and day-to-day life.
