Petroleum Dealers Divided Over Strike as Govt Proposes Higher Sales Commissions

The federal government has managed to create a division among protesting petroleum dealers by offering higher commission rates on sales to offset the impact of the 0.5 percent turnover tax imposed through Finance Bill 2024. The government plans to give a higher commission rate to dealers and pass the resulting tax impact on to consumers. Many dealers from Lahore and Rawalpindi i.e. the Reformers Group of the Pakistan Petroleum Dealers Association (PPDA) announced they would not join the strike and instead negotiate with the government. They vowed to keep pumps open on July 5 to avoid economic disruption reported Dawn. Notably, OMCs are pushing for a 60 percent increase in their profit margins. Their spokesperson, Hasan Shah, mentioned ongoing discussions with the government to address their concerns about dual taxation on petroleum dealers. The Reformers Group has even criticized the strike called by some Karachi dealers, accusing them of prioritizing the interests of Oil Marketing Companies (OMCs) over their community. Chairman PPDA Abdul Sami Khan earlier announced that petrol stations would be closed all over Pakistan on Friday, despite alleged intimidation tactics. Meanwhile, the Petroleum Division has instructed provincial governments and regions to ensure the movement of oil tankers during the day to maintain supply at open stations, a departure from the usual nighttime-only policy. The government has directed OMCs to keep their outlets open during the strike and maintain communication with the Ministry of Energy. On Thursday, a joint statement from the Oil and Gas Regulatory Authority (OGRA) and the petroleum division assured sufficient petroleum product availability and urged OMCs to maintain supplies at stations. The federal government has been engaging with dealers to persuade them to cancel the strike by offering them an increase in dealer commissions to at least Rs. 11.20 per liter to cover the 0.5 percent turnover tax. Dealers in Rawalpindi, Islamabad, and Lahore have promised to keep their stations operational. OMCs represented by the Oil Companies Advisory Council (OCAC) are demanding an increase in profit margins on petrol and diesel sales from Rs. 7.87 to Rs. 12.65 per liter.