Key Takeaways
- Petroleum dealers express concern over unclear payment mechanism for fuel subsidies.
- PM’s Fuel Relief Scheme launched despite dealers’ lack of clarity.
- PPDA chairman claims no consultation with dealers before scheme launch.
Petroleum dealers in Pakistan are expressing frustration over the lack of clarity regarding the payment mechanism for the recently launched fuel subsidy scheme. The Pakistan Petroleum Dealers Association (PPDA) has raised concerns that without a clear understanding of how they will be compensated, many dealers may drop out of the scheme.
During a press conference in Karachi, PPDA Chairman Malik Khuda Bakhsh highlighted the confusion surrounding the payment process. He stated that no fuel pump can afford to bear a loss of Rs100 per litre without knowing how they will be reimbursed. The PPDA claims that officials from the Oil and Gas Regulatory Authority (Ogra) and oil marketing companies say the petroleum ministry will pay the subsidy, while ministry officials maintain that the finance ministry will handle the payments. Finance ministry officials, on the other hand, assure that the State Bank will release the funds within a day or two.
A day earlier, the National Steering Committee on Fuel Subsidy, chaired by Deputy Prime Minister Ishaq Dar, had ordered that payments to fuel stations under the PM’s scheme be processed within 24 hours through the State Bank of Pakistan. However, Mr Bakhsh expressed disappointment, stating that the government had assured dealers of consultation before the launch but failed to deliver on this promise.
The PPDA Vice Chairman Tariq Hassan added that around 14,000 dealers across the country have been trying to contact the government for the past three days. He emphasized that whenever the government enforces something, communication stops, leading to confusion and frustration among dealers.
Anwar Kamal, another PPDA Vice Chairman, stressed that dealers could not afford to have billions of rupees tied up for a long period under this scheme. He argued that the government must negotiate with dealers to ensure the scheme’s success.
In response to the dealers' concerns, Prime Minister Shehbaz Sharif ordered the establishment of facilitation desks comprising administration officials, volunteers, and petrol pump staff to assist citizens in obtaining fuel subsidies. These desks were rolled out across the country at midnight on Wednesday, following the launch of the pilot phase in Islamabad.
Despite the government's efforts to address the dealers' concerns, the PPDA has invited officials to a virtual meeting on Thursday morning to discuss the payment mechanism in detail. PPDA Chairman Malik Khuda Bakhsh stated that Ogra officials had reached out to brief him, but he requested written information to relay to his association members.
The situation highlights the ongoing challenges in implementing the fuel subsidy scheme and the need for clear communication and consultation between the government and the petroleum dealers.
Officials from Ogra and oil marketing companies say that the petroleum ministry will possibly pay the subsidy amount, whereas ministry officials maintain that payments will be made by the finance ministry, while finance ministry officials assure us that the State Bank will release the funds in a day or two,“
Malik Khuda Bakhsh, PPDA Chairman
The government has to understand that if payments are not reimbursed in time, many dealers will stop participating in [the scheme], as many previous promises were also not fulfilled by the government,”
Malik Khuda Bakhsh, PPDA Chairman
