Petrol pump owners seek higher commission, warn of nationwide shutdown

ISLAMABAD: The All Pakistan Petrol Pump Owners Association and the Pakistan Petroleum Dealers Association on Tuesday called on the government to immediately raise their commission, saying they may have to close fuel stations across the country if margins are not revised in line with recent increases in petroleum prices.

At a press conference, the two associations said they wanted the margin to be revised to eight per cent of the invoice price. They argued that the existing fixed profit of Rs8 per litre was no longer enough to meet rising business expenses.

They also said the current margin structure had made it increasingly difficult to continue accepting bank credit cards and corporate fuel cards. One petrol pump owner said, “Currently, we are paying 0.75pc to banks and card companies on every Rs100 of fuel sold,” adding to the financial pressure on retailers.

PPDA Chairman Abdul Sami Khan said the cost of doing business had climbed to an unprecedented level and that continuing operations on margins that had not been revised for a long time was no longer economically sustainable. He said the association would decide its next course of action at a meeting with other stakeholders in Karachi next week.

Abdul Sami Khan also said the latest fuel price increase came after the associations held a meeting with Petroleum Minister Ali Pervaiz Malik, but their main concerns were not resolved in that discussion.

He further said the Balochistan government had issued a notification stating that petrol would be sold at Rs280 per litre across the province. He alleged that Iranian petrol was being brought in illegally and that its price was being determined locally.

APPPOA Chairman Humayun Khan said the business of petrol pump operators was also being badly affected by the inflow of smuggled fuel. He questioned why the authorities tasked with stopping smuggling had failed to curb it and asked who was responsible for controlling smuggling at the borders.

APPPOA Vice Chairman Nouman Ali Butt said fuel retailers were currently working on a margin of less than 2pc, which he described as unsustainable. He said the association was seeking a guaranteed minimum margin of Rs6 per litre, along with a flexible adjustment formula to reflect future increases or decreases in fuel prices.

He added, “The Oil and Gas Regulatory Authority (Ogra) has guaranteed a margin of Rs8.64 per litre for petrol pump operators,” and said both associations were jointly pressing the government to approve the increase they had requested.

Recent fuel price changes

According to the details shared at the press conference, the government first raised petrol and diesel prices by Rs55 per litre on March 6 after the US-Israel war on Iran began. In the weeks that followed, Prime Minister Shehbaz Sharif said on three separate occasions that he had turned down proposals to increase fuel prices despite a rise in international market rates.

However, last week the government announced what was described as an unprecedented increase of 43 per cent in petrol prices and 55pc in high-speed diesel prices. A day later, Prime Minister Shehbaz reduced the petroleum levy by Rs80 per litre, bringing the petrol price down to Rs378 per litre.