Petrol dealers reject fuel relief scheme, warn of station closures

He warned that petrol stations would be closed if dealers were forced to implement the scheme. The association welcomed the government’s initiative to provide fuel relief to consumers but objected to the proposed mechanism, saying the scheme had been formulated without consultation with petroleum dealers.

Malik Khuda Bakhsh said the relief initiative was commendable, but the government had yet to clarify how and by whom the subsidy would be paid to dealers. He demanded that the relief amount be provided directly to consumers and that the previous mechanism for fuel subsidies be restored.

He also called for implementation of the scheme to be halted until the dealers’ reservations were addressed. The PPDA chairman further demanded that petroleum prices be revised once a month and called for consultations with the dealers’ association on the fuel relief programme.

He also sought an increase in petroleum dealers’ margins to 8 percent. Khuda Bakhsh said the association had been trying to contact the government for the past three days but had received no response.

He also highlighted rising transportation costs, saying the arrival of Saudi oil through the Red Sea had taken more than 23 days, compared with around a week for petrol supplies from Gulf countries through the Strait of Hormuz.

Rejecting the idea of a “smart lockdown” to deal with the fuel crisis, he said such a measure would severely affect business activity.

He said a lockdown might have been considered during the COVID-19 pandemic, but it was not a solution to the current petroleum price crisis., dealers’ capital was already under pressure due to inflation, while the proposed relief scheme could leave billions of rupees tied up.

The association also pointed to billions of rupees in outstanding payments from oil marketing companies, warning that the existing mechanism could push around 14,000 dealers across the country into financial difficulties.