Monday, June 17, 2024

Petroleum Dealers Called off Strike as Govt Agrees to Increase Profit Margin

After a long and intense 7-hour meeting at PSO House in Karachi on Monday evening, the second round of talks between the Pakistan Petroleum Dealers Association and the government about the profits on petroleum products has ended successfully.

Sources close to the matter said that both sides reached an agreement and have officially documented it. Representatives from the Ministry of Petroleum, OGRA, and petroleum dealers will now sign the agreed-upon document. Initially, the ministry proposed an increase of Rs1.64 per litre in the profit margin, but the petroleum dealers resisted it. Eventually, they agreed to the proposal as the session went on.

The leader of the association, Malik Khadim Baksh, confirmed the development and said that instead of a one-time increase, the margin will be gradually increased in four stages over 15-day intervals. This means there will be a 41 paisa per litre increase every 15 days until the full recommended margin is reached within two months.

The approved increase in the dealer’s margin will come into effect on August 1, and the final stage will be completed by September 30.

Before this decision, petroleum dealers were asking for a significant increase of 5 rupees per litre on their existing margin of 6 rupees per litre. However, the Minister for Petroleum Affairs linked the increase to a condition of a minimum monthly wage of Rs25,000 for pump workers and an 8-hour working day.

To assess the expenses of petroleum dealers, data from over a thousand petrol pumps in both rural and urban areas were collected over the past two days. The proposed increase of Rs1.64 per litre was based on this analysis.

Earlier, the dealers had threatened to shut down their petrol pumps indefinitely because the outgoing government had not fulfilled 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 open for two days during the month of Muharram, specifically on the 9th and 10th.

He mentioned that the current profit margin per litre is Rs6, and the PPDA has been asking for an increase of Rs5 to make it Rs11 per litre.

Abdul Sami also accused the government of ignoring the smuggling of Iranian petrol and diesel, which has caused a significant 30% decline in the revenues of authorized petroleum dealers.

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