No petrol strike as negotiations between govt and dealers prove successful

ISLAMABAD: The federal government has agreed to the demands of the Petroleum Dealers Association (PPDA) and accepted the increase in dealers’ margin on the sale of petrol and high speed diesel (HSD) by Rs 1.64 per litre.

This decision comes after a marathon meeting held on 24th July 2023, in the presence of Chairman OGRA, DG (Oil), and Managing Director (MD) of Pakistan State Oil (PSO). The revised margin will be implemented in four equal instalments of Rs 0.41/litre, starting from 1st September 2023, subject to competent authority approval.

The meeting between the government and PPDA representatives, along with other stakeholders in the oil industry, was the second round of talks. Initially, petroleum dealers expressed reservations about the proposed increase but eventually agreed to the terms after hours of discussions.

Under the agreement, the dealers’ margin will increase by 41 paise per litre every 15 days over the next four fortnights, instead of a one-time raise. This will lead to an overall increase of Rs 1.61 per litre in petrol and high speed diesel (HSD) prices, in addition to any revision made by the government.

Presently, the dealers’ margin stands at Rs 6 per litre on petrol and diesel. With the new agreement, it will rise to Rs 7.64 per litre after two months.

Last week, PPDA had threatened a nationwide shutdown of petrol stations from July 22 if their margin demands were not met. Following successful negotiations with the Minister of State for Petroleum, the nationwide strike was deferred until Monday.

According to sources in the petroleum division, the dealers’ initial demand was an increase from Rs 5 per litre to Rs 11, but it was ultimately agreed that the margin would be determined based on actual data acceptable to all stakeholders.

During the discussions, the government also focused on collecting petroleum dealers’ sales figures to determine their actual profit margins. Concerns were raised about diesel and petrol smuggling from Iran, which dealers claimed had led to a 30% reduction in their sales, said sources.

The agreement was signed by DG Oil, Imran Ahmed, Masroor Khan, Chairman OGRA, and Abdul Sami Khan, Chairman PPDA.

Following the agreement, the Petrol Pump Dealers Association (PPDA) expressed its appreciation to Chairman Abdul Sami Khan, an ex-Minister, for successfully negotiating the upward revision of margins. The PPDA delegation, led by Chairman Abdul Sami Khan, also included other key members.

With the successful resolution of the margin issue, the government aims to avert a nationwide strike and continue to address concerns related to the petroleum sector, ensuring a stable supply chain and fair pricing for consumers.