Dealers push for 8% margin on fuel sales

ISLAMABAD: Petroleum dealers have asked the government to raise their margin to 8% during a meeting in which Petroleum Minister Ali Pervaiz Malik outlined the proposed shift from weekly to daily fuel price announcements and discussed broader pricing reforms and deregulation.

According to the details shared from the meeting, Malik met a delegation of the Pakistan Petroleum Dealers Association (PPDA) led by its chief adviser Malik Khuda Baksh to discuss petroleum pricing reforms, deregulation and issues faced by dealers. The delegation also thanked the government for managing petroleum product supplies during the challenges linked to the Strait of Hormuz crisis and said uninterrupted fuel availability had been maintained across the country despite regional uncertainty.

Malik Khuda Baksh told the minister that while several neighbouring countries had faced law and order problems because of fuel shortages, Pakistan had been able to keep supplies smooth through timely steps. He also assured the minister of the association’s full support for the government’s policy.

The minister briefed the delegation on the move from weekly to daily petroleum price notifications, saying the new system would rely on a seven-day rolling average of international prices. He said the earlier weekly method was also based on a seven-day average, but under the proposed arrangement prices would be updated every day in order to improve transparency, reduce distortions in the market and more closely reflect movements in global prices.

The PPDA supported the proposed mechanism during the meeting. Malik said the government was moving towards a market-based pricing system aimed at improving transparency and safeguarding consumers. He said periodic price announcements had increasingly left room for hoarding and market manipulation, creating avoidable distortions, and added that daily pricing on the basis of a seven-day rolling average would help discourage such practices while making the system smoother and more transparent.

The dealers’ delegation also asked that petroleum dealers be taken into consultation when rules and operational arrangements are being developed between oil marketing companies and dealers. The minister told them that their input would be taken into account.

The issue of dealer margins also came up during the meeting, with the PPDA seeking an increase to 8%. Malik said progress would be made on the matter and arranged a meeting between PPDA representatives and the Oil and Gas Regulatory Authority on Tuesday to discuss the issue and other concerns in detail.