KARACHI: A strike to shut down petrol pumps has been averted as the negotiations between petroleum dealers and the government on product margins have been successful.
Petroleum Dealers Association held marathon talks for over seven hours with representatives of the Petroleum Division at PSO House and reached a conclusion.
Both sides have written an agreement which will be signed by the Ministry of Petroleum, Oil and Gas Regulatory Authority (OGRA), and the Pakistan Petroleum Dealers Association (PPDA).
According to the agreement, the petroleum dealers will receive a phased increase in product margins. The Ministry of Petroleum has recommended an increase in product margin by Rs.1.64. The dealers finally agreed after extensive negotiations and initial refusal for several hours.
The product margin will be increased in four phases every fortnight instead of a single time. The dealers will receive an increase in profit margin by 41 paisas after every 15 days. The complete proposal will be available in two months.
The approved increase in the dealer’s margin is scheduled to take effect on August 1, with the final stage expected to be completed by September 30.
On Friday, the petroleum dealers deferred their strike after the government agreed to increase the dealers’ profit margin.
The dealers had demanded the government double their profit margin from the current level of 2.4 percent to 5 percent. This amounts to Rs12 per litre at the current petrol prices.
The dealers said the dealer’s commission on petrol has completely evaporated due to high inflation and interest rates. The dealers said the margin was fixed Rs6 per litre which was insufficient.
Musadik Malik had earlier stated that the government would collect petroleum sales data from 2,000-3,000 petrol pumps to determine appropriate profit margins. vThis data-based decision aims to avoid criticism ahead of the next parliamentary elections scheduled for later in 2023.
