Dealers threaten shutdown over fuel relief scheme

The Pakistan Petroleum Dealers Association (PPDA) has refused to participate in the federal government's fuel relief scheme until the subsidy payment mechanism for dealers is clarified, warning that petrol stations could shut down if the programme is imposed on them. On the other hand, Prime Minister Shehbaz Sharif on Wednesday chaired a meeting to review progress on the PM Special Relief Scheme aimed at providing relief to low-income and middle-class citizens in view of recent increase in petroleum product prices amid the situation in the Gulf region. The prime minister directed the establishment of facilitation desks comprising administration officials, volunteers and petrol pump staff to assist citizens in easily obtaining the subsidy. He directed that personnel deployed at the facilitation desks should guide eligible citizens and provide them with all possible assistance in registration and other necessary procedures. The prime minister also asked the relevant authorities to remain proactive in creating public awareness about the scheme. Under the scheme, fuel subsidies are being provided to owners of motorcycles, rickshaws and vehicles with engine capacities of up to 800cc, PM Office Media Wing said in a press release. PPDA Chairman Malik Khuda Bakhsh, accompanied by office-bearers of the association and dealers, expressed reservations about the federal government's fuel subsidy programme at a press conference. The Prime Minister's Fuel Relief Scheme, announced on September 13 amid a continuous rise in fuel prices due to a war in the Gulf, provides a Rs100-per-litre petrol subsidy to eligible motorcycles, rickshaws, other two- and three-wheelers and cars of up to 800cc. Talking about the scheme, Bakhsh described it as "commendable" but objected to its implementation mechanism. He said the government had yet to clarify who would pay the subsidy and urged authorities to clearly state which institution or agency would reimburse dealers. The PPDA chairman demanded that the fuel relief amount be paid directly to consumers and that the previous mechanism used for fuel subsidies be restored. He also called for petroleum product prices to be fixed once a month instead of being revised more frequently. The PPDA chairman demanded that the government consult the petroleum dealers' association over the relief scheme and increase dealers' margin to 8%. He complained that the association had been trying to contact the government for the past three days but had received no response. Bakhsh also raised concerns over the increased cost and transit time involved in importing petroleum products through the Red Sea. He said transporting Saudi oil via the Red Sea route now takes more than 23 days, whereas petroleum products from Gulf countries previously reached Pakistan through the Strait of Hormuz in about a week. He also rejected imposing a "smart lockdown" in response to the fuel price crisis. Bakhsh said petroleum dealers could not afford a smart lockdown as it would severely affect business activity. He said such restrictions might have been understandable during the Covid-19 pandemic, but a smart lockdown is not a solution to the current crisis involving petroleum product prices. Association Vice Chairman Anwar Kamal said dealers would not join the scheme until the government clearly explained who would pay the subsidised amount and how the payments would be made. "If the scheme is imposed on us, we will shut down fuel stations," he warned. Kamal said the government formulated the fuel relief scheme without consulting petroleum dealers. He said the association had reservations about its mechanism and called for the government to provide relief to consumers directly through a simple and transparent mechanism. According to the PPDA, dealers' capital is already under pressure due to inflation, while the proposed relief scheme could leave billions of rupees tied up in dealers' accounts. The association questioned who would compensate dealers for any resulting financial losses. It said billions of rupees owed by oil marketing companies to petroleum dealers are already outstanding and warned that the proposed mechanism could push around 14,000 dealers across the country into a financial crisis. Deputy Prime Minister and Foreign Minister Senator Mohammad Ishaq Dar, Ministers Ahad Khan Cheema, Attaullah Tarar, Shaza Fatima Khawaja and Ali Pervez Malik, Minister of State for Finance Bilal Azhar Kayani, Special Assistant Tariq Bajwa and senior officers of relevant institutions attended the meeting. The meeting was briefed on progress regarding the fuel subsidy scheme. Following the launch of its pilot phase in Islamabad, the scheme has now been launched across the country, including Azad Jammu and Kashmir and Gilgit-Baltistan. The meeting was informed that the scheme had been designed in a simple and easy manner for the public to understand. Only four pieces of information were required for registration: the applicant's CNIC number, vehicle number plate, province of registration and vehicle registration date. Complete details of the fuel subsidy scheme are available on its Urdu website, www.pmfuelrelief.pk. The meeting was further informed that the number of successful registrations was gradually increasing, while provincial governments were extending full cooperation for nationwide implementation of the scheme.