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Petroleum dealers call off nationwide strike after deal with govt

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The All Pakistan Petrol Pump Dealers Association (APPPDA) has called off the nationwide strike following successful negotiations with the government over the profit margin on petroleum products.

The federal government and the association agreed that the dealers’ margin on petrol will be increased by Re0.99 per litre while on high-speed diesel (HSD) it will be hiked by Re0.83 per litre.

Information Minister Fawad Chaudhry also confirmed the development in a tweet late Thursday night.

Against the association’s demand of increasing the dealer margin to 6% on petroleum products (approximately a hike of Rs5 per litre on petrol), the government has agreed to raise it only by Re0.99 per litre on petrol.

Earlier today, the petroleum association was not ready to even move an inch and was stuck to its demand of a 6% increase in margin.

However, Energy Minister Hammad Azhar made it clear that the “illegitimate demands” of the PPDA for a substantial increase in their margin will not be accepted.

In a statement, the minister said that some elements were pushing the government to increase the profit margin by Rs9 per litre on the sale of petroleum products. He stated that the government could not hike margins by Rs9 per litre to appease a few oil marketing companies.

The government is aware of the problems of the owners of petrol pumps, the minister said, adding that their legitimate demands will be accepted by the government.

A summary relating to the increase in the profit margin of petroleum dealers, he said had already been moved to the Economic Coordination Committee (ECC) and the ECC would decide the matter in its next meeting.

Also read: ‘Govt taking lowest tax on petroleum products’

As per the agreement signed by both the parties late Thursday night, it is stated: “In the background of revision of margins of petroleum products, multiple consultation sessions were held with the Pakistan Petroleum Dealers Association which included the participation of key OMCs, OCAC, and other leading players”.

It added that all stakeholders appreciated the Petroleum Division’s proposal for the enhancement of 99 paisas in the existing margin of petrol i.e., Rs3.91/litre.

“The proposal for 25% increase in the margin of dealers will cover all delays in the revision of margin in the past and would also help dealers in mitigating the impact of inflation.”

The Petroleum Division has assured that it will put all its endeavours to defend the said proposal of 25% increase in the existing margin before the Economic Coordination Committee (ECC) of the cabinet and the federal cabinet so that this historic relief to the petroleum dealers in the shape of sizeable enhancement in their margins becomes a reality.

“All parties clearly understand that passing on the extra costs to the general public/consumers of petroleum products is not viable. However, the Petroleum Division assured the dealers association that after 6 months (during June, 2022) margins will be readjusted according to the level of inflation prevalent at the time.

The dealers association suggested that in the subsequent adjustment (during June, 2022) the margins may be fixed in percentage terms and the Petroleum Division will put its best efforts to obtain approval of the competent forum, for revision of dealers’ margin up to 4.40% of the selling price.

This arrangement of enhancing margin presently by 25% and subsequent readjustment after 6 months will ensure the safety and security of the business of the petroleum dealers without passing the extra burden to the general public. Both parties agreed to work mutually for the betterment of the country, the agreement said.

On the call of the PPDA countrywide strike started from Thursday morning till an indefinite period which triggered panic buying on Wednesday.

Long queues, brawls and traffic jams were reported during the morning at various petrol pump stations across the country. However, by the evening thing started coming to normal as petrol pumps across the country started opening.

The main reason for the failure of the strike was the non-participation of oil tankers associations, the opening of the outlets operated by big OMCs and the availability of CNG.

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