Prime Minister Shehbaz Sharif launched a relief scheme for the public following a rise in global oil prices. Under the scheme, motorcycles, rickshaws, Qingqi rickshaws, and other two and three wheelers are eligible for relief of Rs100 per litre on up to 20 litres of petrol per month, while vehicles up to 800cc are eligible for relief of Rs100 per litre on up to 30 litres per month. The Government of Pakistan has also introduced a digital fuel relief system.
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Petroleum Dealers Reject Fuel Relief Package
The Pakistan Petroleum Dealers Association rejected the implementation of the Prime Minister’s relief scheme, saying that dealers were not adequately consulted about the package. The association said it would not be workable for dealers to sell petrol at the reduced price without a clear mechanism for reimbursement. The dealers have also questioned whether the government can require them to bear the financial burden of the relief scheme.
PPDA Chairman Khuda Bakhsh Warns of Pump Closures
Pakistan Petroleum Dealers Association Chairman Malik Khuda Bakhsh said at a press conference in Karachi on Wednesday that dealers had not been properly consulted about the relief package. He said the government had not provided sufficient clarity, from the dealers’ perspective, on how the subsidy would be reimbursed. He questioned why dealers should have to finance the relief and warned that petrol pumps could be closed if dealers were forced to implement the package without an agreed mechanism.
Government Announces Separate Relief for Small and Larger Vehicles
Under the special petrol relief scheme, motorcycles, rickshaws, Qingqi rickshaws, and other two and three wheelers are eligible for Rs100 per litre relief on up to 20 litres of petrol per month. Vehicles with engines of up to 800cc are eligible for the same Rs100 per litre relief on up to 30 litres per month.
Rs75 Billion Approved for Relief Scheme
The Economic Coordination Committee approved Rs75 billion for the Prime Minister’s Fuel Relief Scheme. Under the scheme, users of two and three wheelers can receive relief of Rs500 per five litre token, while users of vehicles up to 800cc can receive relief of Rs1,000 per 10 litre token. The scheme is restricted to non commercial users, with relief limited to one vehicle per user or owner.
Digital Fuel System Introduced
Under the digital fuel system, eligible citizens can register by sending their CNIC number, vehicle number, province information, and vehicle registration date to 9771. Before visiting a fuel station, registered users can send “TOK” to 9771 to receive a fuel token. The fuel station verifies the token through a dedicated mobile application before providing the subsidised fuel.
Fuel Relief Package Implementation
The fuel relief scheme was first implemented in Islamabad from midnight between September 14 and 15, 2026. The scheme was scheduled to be extended nationwide, including Azad Jammu and Kashmir and Gilgit Baltistan, from midnight between September 16 and 17.
Concerns Raised by Petroleum Dealers
1. Lack of Clarity Over Subsidy Reimbursement
One of the main concerns raised by petroleum dealers is how the subsidy amount will be reimbursed to them when they sell petrol to eligible consumers at the reduced price. The dealers have called for a clear and reliable reimbursement mechanism.
2. Risk of Billions of Rupees Being Tied Up
Dealers are concerned that if they have to provide fuel at a reduced price before receiving reimbursement, their working capital could become tied up. They say this could create pressure on their day to day business operations.
3. Risk of Financial Pressure
The association says placing the financial burden of the relief scheme on dealers would be difficult. Smaller dealers, in particular, could face greater pressure if they have to use their own working capital while waiting for reimbursement.
4. Demand for Direct Relief to Consumers
The dealers have argued that the relief should reach consumers through a mechanism that does not require dealers to finance the subsidy from their own working capital. They have called for a system that protects both consumers and fuel retailers.
5. Demand for a Simple Reimbursement Mechanism
Petroleum dealers have called for a clear and straightforward mechanism for subsidy reimbursement. They say a transparent process would reduce uncertainty and help avoid delays in payments. The government, however, has said that payments to fuel stations will be settled within 24 hours through the State Bank of Pakistan.
6. Demand for an 8 Percent Dealer Margin
The PPDA has also called for the implementation of an 8 percent margin for petroleum dealers. The association says dealers are facing pressure from rising operating costs and limited working capital.
7. Risk of Petrol Pump Closures
The dealers have warned that petrol pumps could be closed if they are forced to implement the relief package without resolving their concerns over reimbursement and the financial burden.
8. Concern Over Cash Flow
Petroleum dealers require continuous working capital to purchase fuel, pay employees, and cover other operating expenses. They fear that delays in reimbursement could put additional pressure on their cash flow.
9. Demand for Government Clarification
The dealers want greater clarity about the reimbursement process, including how payments will be made and how quickly dealers will receive the money. The government has stated that payments to fuel stations will be settled within 24 hours through the State Bank of Pakistan.
10. Protecting Both Consumers and Dealers
The dealers say the purpose of the fuel relief scheme is to reduce the burden on consumers, but they also want the implementation mechanism to ensure that fuel retailers are not left carrying the financial burden. They are calling for a system that provides relief to eligible consumers while protecting dealers’ working capital.
Conclusion
Petroleum dealers have called for a clear reimbursement mechanism, timely payments, and appropriate margins under the fuel relief scheme. The government says the relief is being financed by the federal government and that payments to fuel stations will be settled within 24 hours, while dealers continue to seek greater clarity and consultation over implementation.
FAQS
- What are petroleum dealers demanding?
Petroleum Dealers are demanding a clear and timely fuel subsidy reimbursement mechanism. - Why are petroleum dealers concerned about the relief scheme?
Petroleum Dealers fear that delayed reimbursement could put pressure on their working capital. - How much fuel relief is available?
Eligible two and three wheelers can receive Rs100 per litre relief on up to 20 litres monthly, while vehicles up to 800cc can receive the same relief on up to 30 litres. - How much was approved for the fuel relief scheme?
The Economic Coordination Committee approved Rs75 billion for the fuel relief scheme. - Why are petroleum dealers threatening to close pumps?
Petroleum Dealers have warned of pump closures if their concerns over the scheme and reimbursement mechanism are not addressed.
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