ISLAMABAD: The official apparatus seems to have formalized a division among the oil merchants who were protesting, leading some of them to suggest that they should receive a larger commission on sales of petroleum goods in order to pass on the cost of the turnover tax to customers.
In the meantime, profit margins for oil marketing corporations (OMCs) have been demanded to rise by 60%.
The Pakistan Petroleum Dealers Association (PPDA) head, Abdul Sami Khan, informed Dawn from Karachi that the nation-wide pumps would be shut off starting at 6 a.m. on Friday, despite the fact that some individuals, whom he did not identify, were “resorting to intimidation.”
On the other hand, in order to guarantee a continuous supply of petroleum products to the open retail outlets “in case the strike becomes effective,” the petroleum division persisted in asking all six chief secretaries of the four provinces—Azad Jammu and Kashmir, Gilgit-Baltistan, and Azad Jammu and Kashmir—to permit “operation of oil tankers movement” during the day on July 5. Under normal conditions, it is not permitted for oil tankers to move during the day.
It also asked the provincial governments to “endeavour/facilitate the opening of maximum petrol pumps and nominate focal persons for close coordination”.
The oil marketing companies have already been directed to keep their outlets operational during the strike and remain in contact with the Ministry of Energy’s monitoring cell.
A joint statement by Ogra and the petroleum division said that there was sufficient availability of petroleum products in the country, and all OMCs had been advised to ensure adequate supplies at petrol pumps.
In Islamabad, some officials not belonging to the petroleum division, Federal Board of Revenue, finance ministry or Ogra were seen interacting with dealers to convince them to call off the strike.
According to reports, government authorities suggested raising dealer fees from the existing rate of Rs8.64 per litre to at least Rs11.20 in order to offset the 0.5 percent turnover tax.
A dealer stated that the government was merely attempting to split up the commission and OMCs’ margin revision that had already become due in the new fiscal year.
According to sources, although the facilitators assured them of a favorable resolution in due course, the government side made no guarantee at this time to eschew such pressure methods from other industries bearing the brunt of the higher tax burden.
On Friday, the dealers pledged to maintain full operation of their filling stations in Lahore, Islamabad, and Rawalpindi.
OMCs want a larger profit margin.
Meanwhile, the oil marketing companies have formally demanded an increase in their profit margin on petrol and diesel sales to Rs12.65 per litre from Rs7.87 at present, up by 60pc.
On behalf of OMCs, the Oil Companies Advisory Council (OCAC) has recommended that this increase was necessitated by “financing costs of maintaining a 20-day stock cover, turnover tax, handling losses, demurrage, financing cost of unadjusted sales tax and operating expenses incurred by OMCs”.
At present, there are about 14,000 retail stations in the country, including about 4,000 owned or operated directly by the major oil marketing companies.
A group of dealers from Lahore and Rawalpindi, known as the PPDA’s Reformers Group, declared they would not be taking part in the strike on July 5. They stated in a statement that before deciding on “extreme options” like an ongoing strike, their group would prefer to have in-depth discussions with the authorities.
It stated, “After issuing the call for a strike, negotiations are futile. As a result, gasoline stations will remain open nationwide on July 5th, as the nation’s economy cannot be stalled at this decisive moment.”
The group’s spokesperson, Hasan Shah, said that Minister of State for Finance Ali Pervez Malik was notified by a delegation headed by PPDA Rawalpindi chairman Numan Ali Butt that petroleum dealers may be subject to monthly or fixed taxes. He clarified that a business could not be taxed in two ways and that doing so would be against the law and result in the closure of the gas stations.
The organization claimed in a statement that the minister gave them assurances that the FBR chairman would take care of the situation.
According to Mr. Shah, in-depth talks were still going on. “Any decision will be made after consultation with the organization of each district of the country if there is no success,” he declared.
“We deny the demand for a strike made by certain dealers in Karachi, as they are serving the needs of oil marketing companies rather than their own community.”
