[Update] – Matters have been amicably resolved between the two, and hence the strike has been called off. Earlier, due to ongoing negotiations between the government and the PPDA, the strike had been postponed until Monday, July 24.
The Pakistan Petroleum Dealers Association (PPDA) has announced a nationwide strike on July 22 to demand an increase in their profit margins, which have been impacted by soaring inflation. The association, representing around 10,000 members, plans to close all petrol pumps in the country at 6 pm on the said date. They blame the petroleum ministry for not addressing their concerns.
The PPDA states that the high interest rates and inflation have severely affected their businesses and are calling for an increase in their dealership margins. They claim that sales have decreased by 30% due to the smuggling of Iranian fuel into the country.
Pakistan is currently facing economic challenges with a weakening currency and persistent inflation, which reached 29.4% in June, after hitting a record high of 38% in May.
In May, the oil industry in Pakistan sought a margin of Rs12 per liter on high-speed diesel and petrol for oil marketing companies (OMCs) due to high business costs. However, the current margin for OMCs on high-speed diesel is Rs6.50 per liter and Rs6 per liter on petrol. Dealers charge an additional Rs7 per liter margin on both fuels.
The oil industry has been grappling with various challenges, including higher international fuel prices, exchange rate fluctuations, increased interest rates leading to higher inventory holding costs, credit letter confirmation charges resulting in higher demurrages, and a high turnover tax of 0.5 percent.
The association states that the current margin revision by the Economic Coordination Committee (ECC) in October 2022 to Rs6 per liter is insufficient and urgently needs to be reviewed.
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