Pakistan’s petroleum dealers say they will not sell subsidised petrol until the government agrees a clear reimbursement mechanism.
KARACHI, September 16, 2026: The Pakistan Petroleum Dealers Association (PPDA) has rejected the federal government’s petrol relief scheme, saying fuel stations will not sell subsidised petrol until a clear and acceptable mechanism for reimbursement is agreed with the dealers’ association.
The government has announced a Rs100 per litre subsidy for bikers, Chingchi rickshaws, other three-wheelers and owners of cars up to 800cc registered after January 1, 2011.
The nationwide petrol subsidy scheme is scheduled to begin on September 17, 2026.
Addressing an emergency press conference, PPDA Chairman Malik Khuda Baksh, Vice Chairman Tariq Hassan and Vice President Anwar Kamal said dealers had not been consulted before the government announced the relief package.
PPDA members, including Ameer Khan, President of the Sindh Zone, and Saeed Khan, President of Karachi, also attended the press conference.
The association said the government had not provided a satisfactory explanation of how petroleum dealers would be reimbursed for the subsidy they would provide to eligible consumers.
“If the government forcibly implements the scheme, we will not be able to operate our petrol pumps,” Khuda Baksh warned.
He said that if the government wanted to provide financial relief to consumers, it should finance the subsidy from its own resources rather than placing the financial burden on petroleum dealers.
PPDA seeks guarantee for subsidy payments
Khuda Baksh said the association had made several attempts to contact officials of the Petroleum Division, particularly Petroleum Minister Ali Pervaiz Malik, after the subsidy scheme was announced.
However, he claimed that the PPDA had not received a response addressing its concerns about the reimbursement mechanism.
The PPDA chairman said dealers needed clarity on how, when and by whom they would be reimbursed for the subsidised petrol sold to eligible consumers.
He also referred to previous commitments made by the federal government which, according to the association, have yet to be fulfilled.
The dealers’ association has therefore called for a formal and reliable payment mechanism before petrol stations are required to provide fuel at the subsidised rate.
Petrol dealers threaten to stop subsidised sales
Tariq Hassan said there were around 14,000 petroleum dealers across Pakistan, warning that dealers would not sell petrol under the relief scheme from Thursday night unless their concerns were addressed.
He said the government could instead implement the subsidy through company-owned petrol stations if it wanted to proceed without reaching an agreement with petroleum dealers.
The dispute comes as the federal government prepares to launch the targeted petrol subsidy nationwide.
The scheme is intended to provide financial relief to eligible owners of motorcycles, three-wheelers and cars with engines of up to 800cc.
However, the PPDA’s opposition has placed the subsidy reimbursement mechanism at the centre of the dispute. Dealers argue that selling petrol at a subsidised price without guaranteed and timely reimbursement could put pressure on their cash flow and business operations.
The government now faces the task of addressing the dealers’ concerns ahead of the planned September 17 launch of the petrol relief scheme.