The government has reached an agreement with the fuel pump owners to increase their profit margins by Rs1.64 per litre on both petrol and diesel, compelling the dealers to call off their strike which was scheduled to start from Monday (July 24).

The increase in the margins would be made in phased manners over the next two-month (Aug-Sept) period to avoid a one-time surge in the prices of petroleum products, which would increase the burden of the already inflation-hit people.

Accordingly, the government would increase their margin in four equal parts of Rs0.41 per litre in each of the four forthcoming fortnightly pricing meetings.

The margins on both diesel and petrol currently stand at Rs7 per litre. The dealers, however, get Rs6.20 per litre after deduction of franchise fee and taxes.

While talking to The Express Tribune, former Pakistan Petroleum Dealers Association (PPDA) chairman Malik Khuda Baksh said the first increase of Rs0.41 per litre would be made with effect from Aug 1, 2023, while the last one would be made in mid-Sept 2023.

The government and the dealers reached the agreement during a marathon meeting which lasted for seven hours, it was learnt.

Speaking to the media at the conclusion of the meeting, PPDA Chairman Abdul Sami Khan said the dealers were reluctant to accept the increase in profit margin, which was significantly less than the promised one of 5%.

This 5% comes to around a total of Rs12 per litre. Currently, petrol and diesel prices are at Rs253 and Rs253.50 per litre, respectively.

“We, however, have accepted the government’s offer to avoid going on strike,” he said.

He said they had reached an agreement signed by Oil and Gas Regulatory Authority (OGRA) chairman, director general of oil and PPDA chairman himself.

Earlier, the petroleum dealers had announced a shutter-down strike for an indefinite period from July 22, 2023 to pressure the government to increase their profit margins to the promised level of 5%.

Later on, they postponed the strike by two days to July 24 (Monday) after State Minister for Petroleum Musadik Malik assured them in a meeting on Friday that the government would revise upwards their margins in two days.

Sources said the government offered to increase the dealers’ margin by Rs1.64 per litre and did not budge throughout the meeting.

The dealers, however, kept pressing the government that the margins offered were low, but finally agreed.

The dealers said many fuel pump owners were either earning no profit at all due to the significant surge in inflation, including hike in power tariff, while the dealers were running in losses instead in profits due to low sales.

LPG strike

In reaction to a strike call by the LPG dealers for Aug 5 and 6, Pakistan LPG Marketers Association (PLPGMA) office-bearers said that they rejected the call as it would increase the hardships of consumers and would be of no benefit.

Vice Chairman Muhammad Ali Haider said in a statement that a few vested interests were misguiding the genuine members of the associations and distributors of LPG.

The dealers who gave the strike call were selling the gas in black.

“The strike call has been given by those who have stored LPG to sell at a higher price.”

The PLPGMA announced detachment from the strike, reiterating that said their outlet would remain open.