The federal government on Monday agreed to increase the margin of petroleum dealers by Rs. 1.64/liter, averting a threatened strike by the Pakistan Petroleum Dealers Association (PPDA) over their profit margins amidst rampant inflation.
The decision to increase the margin was arrived at after a meeting between Minister of State for Petroleum Musadik Malik and PPDA representatives, along with other stakeholders of the oil industry and government departments. Speaking with media after the meeting, PPDA Chairman Abdul Sami Khan said dealers were not satisfied with the minor increase but had agreed to it to avoid striking for their demands.
He said the agreement between the dealers and the government had also been ratified by the OGRA chairman and director-general, adding that following its full implementation after two months, dealers’ margins would increase from the current Rs. 6/liter on petrol and diesel to Rs 7.64/liter. According to local media, the Rs. 1.64/liter increase would be staggered over the next two months, with a 41 paisa/liter increase every two weeks.
The proposed increase to the profit margin was triggered by the PPDA—which claims to represent almost 10,000 dealers nationwide—threatening to shut down petrol pumps across the country from July 22 if their demands were not. Last-minute negotiations on July 21 led to the strike being deferred by two days, with Monday’s meeting resolving the situation.
Earlier, the dealers had demanded increasing their margin from the existing Rs. 6/liter to Rs. 11/liter, or roughly 5 percent of the prevailing fuel prices. This was considered a non-starter by the government, keeping in mind the pressure on consumers amidst already high prices. In a press conference announcing the strike, the PPDA had lamented that in addition to inflationary pressures, they were also facing 30 percent in losses due to smuggling of cheaper fuel from Iran.