Petroleum dealers postpone planned strike as govt approves margin revision

Why This Matters

Key context: <p>The Pakistan Petroleum Dealers’ Association (PPDA) on Friday called off its plans to begin a strike on Saturday after the government approved a proposed revision in the dealers’ margins.</p> <p>The nod for the revision was also confirmed by the finance ministry in a statement, which did not specify the amount.</p> <p>The Economic Coordination Committee had “deliberated on the matter regarding revision of dealers’ margins on motor spirit and high-speed diesel” during a meeting chaired by Finance Minister Muhammad Aurangzeb, the statement said, adding that a revision of the margin had been approved.</p> <p>Meanwhile, the PPDA said the government had increased the petroleum dealers’ margin by Rs1.34 per litre, bringing the total margin to Rs10 per litre.</p> <p>The PPDA had threatened the strike, demanding an eight per cent increase in the petroleum dealers’ margin. Currently, the dealers’ margins are Rs8.64 per litre.</p> <p>As the PPDA Chairman Bakhsh announced during a press conference in Karachi that they were calling off the strike, he also said that petroleum product prices may once again be revised every 7 or 15 days, instead of being changed daily.</p> <p>Last month, the government <a href="https://www.dawn.com/news/2016355">announced</a> that it would start revising fuel prices on a daily basis, rather than the weekly system that had been in vogue in recent months. The government on Thursday rejected the dealers’ demand for monthly price fixing, adding that it will <a href="https://www.dawn.com/news/2022658">continue</a> the daily price-fixing mechanism for petroleum products.</p> <p>In its Friday statement, the PPDA said it “had postponed Saturday’s planned strike based on the government’s assurances”.</p> <p>“However, [the PPDA chairman] warned that the association would continue its protest until all of its demands were accepted,” the statement added.</p> <p>The association’s vice chairman, Tariq Hassan, further said that “because dealers had not received an increase in their margin for the past three years, approximately $50 million belonging to petroleum dealers remains outstanding with the government”.</p> <figure class='media w-1/2 sm:w-3/5 media--center media--embed media--uneven' data-original-src='https://www.facebook.com/story.php?story_fbid=122107325397409480&amp;id=61592284409180&amp;rdid=SXippsc8sQx5lEVh#'> <div class='media__item media__item--facebook media__item--relative'><div class="fb-post" data-href="https://www.facebook.com/story.php?story_fbid=122107325397409480&amp;id=61592284409180&amp;rdid=SXippsc8sQx5lEVh#" data-width="auto"></div></div> </figure> <p>On Wednesday, the PPDA issued a <a href="https://www.dawn.com/news/2022267">72-hour ultimatum</a> to the government over its failure to fulfil promises made by the petroleum minister to resolve their issues, especially the increase in margin to eight per cent on the retail sale price of petrol.</p> <p>The association had warned that if the government failed to meet its demands within 72 hours, petrol pumps across the country would shut down indefinitely from 6am on Saturday (August 15) and would not reopen until those demands were met.</p> <p>A delegation of petroleum dealers had also held brief talks with Petroleum Minister Ali Pervaiz Malik in Islamabad on Wednesday.</p> <p>In the meeting, the minister had assured the delegation that a Rs1.34 per litre increase in dealers’ margin, which had been pending for two years, had already been sent to the ECC and was awaiting approval from the Federal Cabinet.</p> This development from dawn.com highlights ongoing changes in the sector.