Fuel dealers demand 8% margin, warn of nationwide shutdown if ignored

ISLAMABAD:Petrol pump owners have demanded an immediate increase in commission to 8 percent of invoice price, warning of a nationwide shutdown if the government fails to address their concerns.

The All Pakistan Petrol Pump Owners Association (APPPOA) and the Pakistan Petroleum Dealers Association (PPDA) have jointly escalated pressure on the government, demanding a significant increase in their sales margin and warning of a countrywide closure of fuel outlets in case their demands are not met.

Addressing a joint press conference, the associations called for revising their commission to 8 percent of the invoice price, arguing that the current fixed margin is no longer viable. “The existing profit of Rs 8 per litre is insufficient to cover our rising operational costs,” a petrol pump owner said.

The representatives issued a clear warning, stating that failure to revise margins in line with recent price hikes would force them into drastic action. “If our commission is not increased, we will be left with no option but to shut down petrol pumps across the country,” they cautioned.

Chairman PPDA Abdul Sami Khan said that the cost of doing business has reached unprecedented levels. “Operating under margins that have remained unrevised for so long is no longer economically viable for petrol pump stations,” he stated.

Highlighting the burden of digital transactions, dealers said they are paying around 0.75 percent to banks and card companies on every Rs 100 worth of fuel sold. “Currently, we are paying 0.75 percent to banks and card companies on every Rs 100 of fuel sold,” a representative explained, adding that this makes it increasingly difficult to continue accepting credit and corporate fuel cards.

Referring to their recent engagement with the government, Sami Khan said, “The price hike was implemented just one day after our meeting with the Petroleum Minister, but our key concerns were not addressed.”

He added that the future course of action would be finalized soon. “Our next strategy will be decided in a meeting with stakeholders in Karachi next week,” he said.

The issue of smuggled fuel also drew strong criticism. APPPOA Chairman Humayun Khan said, “Our business is being severely affected by the influx of smuggled fuel.” He questioned the authorities’ performance, asking, “Who is responsible for stopping smuggling at the borders, and why has it not been controlled?”

The associations also pointed to the situation in Balochistan, where the government has fixed the price of smuggled Iranian petrol at Rs 190 per litre and high-speed diesel at Rs 220 per litre. They said this has created further distortions in the market, especially when petrol is officially notified at higher rates.

Vice Chairman APPPOA Nouman Ali Butt said that the current margin structure is unsustainable. “Fuel retailers are operating on margins of less than 2 percent, which is not viable,” he said. He added, “We are demanding a guaranteed minimum of Rs 6 per litre along with a flexible adjustment mechanism to account for future price changes.”

He also referred to the regulator’s benchmark, stating, “The Oil and Gas Regulatory Authority (OGRA) has already guaranteed a margin of Rs 8.64 per litre for petrol pump operators.”

Standing united, both associations reiterated their demand and warning. “We are working together on a joint platform, and if our demands are not met, a nationwide shutdown will be inevitable,” they said, signaling serious disruption risks for the country’s fuel supply chain.