Pakistani Petrol Dealers Launch Nationwide Strike Over Tax Dispute

Amid mounting frustrations and stalled negotiations, the Pakistan Petroleum Dealers Association (PPDA) has initiated a nationwide strike today, a move that promises to disrupt fuel supplies across the country. This drastic step comes after protracted discussions with both provincial and federal authorities failed to resolve a contentious tax issue, as reported by Dawn.

Abdul Sami Khan, the chairman of the PPDA, voiced his exasperation over the government's inability to address the core grievances of petrol dealers. Despite engaging with high-ranking officials, including the finance minister, the chairman of the Federal Board of Revenue (FBR), the Oil and Gas Regulatory Authority (Ogra) chief, and the petroleum secretary, no satisfactory resolution was reached. "They asked us to call off the strike and assured us of resolving the issue, but we cannot delay our action based on mere assurances," Khan emphasized in his interview.

The crux of the controversy lies in the recent introduction of a turnover tax in the federal budget. Petrol dealers argue that this tax, on top of the existing fixed withholding tax, amounts to double taxation, which they deem both unfair and unconstitutional. The turnover tax, set at 0.5 per cent, has added a significant burden to the operational costs of petrol stations, prompting the PPDA to take this drastic measure.

The PPDA has made it clear that over 13,000 petrol stations nationwide will cease operations from 6am on July 5. Khan has warned that the strike could extend beyond the initial shutdown if their demands are not met and formally notified by the government. In preparation for the strike, petrol station owners were urged to stockpile fuel supplies by July 4 to mitigate the impending disruption.

In anticipation of the strike, the petroleum division has established a monitoring cell to oversee the fuel supply chain and coordinate with relevant stakeholders. This cell includes representatives from oil marketing companies (OMCs), Ogra, and the petroleum division, who have been designated as focal persons to ensure smooth operations during the strike period. The petroleum division has also directed OMCs to maintain sufficient stocks of petroleum products at designated sites to prevent a supply shortage.

The government's response to the dealers' demands has been complicated by the legislative nature of the turnover tax. While the FBR chairman had previously assured dealers of the possibility of withdrawing the tax, he also noted that such a reversal would require legislative amendments. The petroleum secretary further clarified that the turnover tax had been formalized through the Finance Act 2024-25, necessitating a legislative process to effect any changes.

As the strike unfolds, the PPDA's stance remains firm. "We will not entertain further discussions with the government until the unjust turnover tax is withdrawn," Khan asserted. The unfolding situation has left the public bracing for potential fuel shortages and disruptions, while the government scrambles to mitigate the impact of the strike.

The coming days will be crucial in determining whether a resolution can be reached or if the nation will continue to grapple with the fallout from this significant industrial action.