Petroleum dealers, govt agree on margins after marathon talks
After an intensive 7-hour negotiation session at PSO House in Karachi on Monday evening, the second round of talks between the Pakistan Petroleum Dealers Association and the government regarding margins on petroleum products has reached a successful conclusion.
Sources close to the matter revealed that following mutual consent, the agreement has been officially documented.
Representatives from the Ministry of Petroleum, OGRA, and petroleum dealers are now poised to sign the agreed-upon document. In the meeting, the ministry initially proposed Rs1.64 per litre increase in the margin, which faced resistance from the petroleum dealers. However, as the session progressed, the dealers eventually accepted the proposal.
Malik Khadim Baksh, a leader of the association, confirmed the development, stating that instead of a one-time increase, the margin will be incrementally increased in four stages over 15-day intervals.
A 41 paisa per litre rise in the margin will be implemented every 15 days, with the aim of achieving the full recommended margin within two months, he added.
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.
Prior to this decision, petroleum dealers were pressing for a substantial 5 rupee per litre increase on their existing margin of 6 rupees per litre. However, the Minister for Petroleum Affairs linked the increase to the condition of a minimum monthly wage of Rs25,000 for pump workers, along with an 8-hour working day.
Over the past two days, data from more than a thousand petrol pumps in both rural and urban areas were collected to assess the expenses of petroleum dealers. The formulated proposal for the incremental Rs1.64 per liter increase was based on this analysis.
Earlier, the dealers had issued a warning, threatening to shut down their petroleum pumps indefinitely, citing the outgoing government’s failure to fulfil its promise of increasing their profit margins to 5%.
During a press conference at the Karachi Press Club on Thursday, Abdul Sami Khan, spokesperson for the association, said that due to the prolonged strike, petrol pumps will only be operational for two days during the month of Muharram, specifically on the 9th and 10th.
He said that the current margin per litre stands at Rs6, but the PPDA has been demanding an increase of Rs5 in order to bring it to Rs11 per litre.
Abdul Sami alleged that the government was turning a blind eye to the rampant smuggling of Iranian petrol and diesel. According to the PPDA spokesperson, the unauthorized sale of Iranian petrol and diesel have caused a significant 30% decline in the revenues of authorized petroleum dealers.