Petrol pump owners, dealers demand increase in commission proportionate to recent price hikes

ISLAMABAD: The All Pakistan Petrol Pump Owners Association (APPPOA) and Pakistan Petroleum Dealers Association (PPDA) on Tuesday demanded that the government immediately increase their commission.

They warned that if their commission was not raised in proportion to recent price hikes, they would be forced to shut down fuel outlets nationwide.

The associations demanded a margin revision to eight per cent of the invoice price, arguing that the current fixed profit of Rs8 per litre was insufficient to cover rising operational costs.

Furthermore, they cautioned that existing margins made it financially impossible to continue accepting bank credit or corporate fuel cards.

“Currently, we are paying 0.75pc to banks and card companies on every Rs100 of fuel sold,” explained one petrol pump owner.

Addressing a press conference, PPDA Chairman Abdul Sami Khan highlighted that the cost of doing business had reached unprecedented levels, arguing that operating under profit margins that had remained unrevised for a long time was no longer economically viable.

He further said that the future course of action would be decided in the meeting of the association with other stakeholders in Karachi next week.

The PPDA chairman said the price hike was implemented after the associations met with the Petroleum Minister Ali Pervaiz Malik, a meeting that reportedly failed to address their primary grievances.

He further said that the Balochistan government had notified that petrol would be available at Rs280 per litre across the province, alleging that Iranian petrol was illegally imported and its price was being set locally.

Speaking at the press conference, APPPOA Chairman Humayun Khan said their business was also being severely affected by the influx of smuggled fuel.

He questioned why the authorities responsible for curbing smuggling had been unable to stop it and asked who was responsible for controlling smuggling at the borders.

APPPOA Vice Chairman Nouman Ali Butt mentioned that fuel retailers were currently operating on a margin of less than 2pc, which was unsustainable. He added that the association was demanding a guaranteed minimum of Rs6 per litre margin, with a flexible adjustment mechanism to account for future price increases or decreases.

“The Oil and Gas Regulatory Authority (Ogra) has guaranteed a margin of Rs8.64 per litre for petrol pump operators,” he added. He added that both associations were working together to press the government for their requested margin increase.

After the US-Israel war on Iran began, the government initially hiked petrol and diesel prices by Rs55 per litre on March 6. On three separate occasions in the following weeks, Prime Minister Shehbaz said that he had rejected recommendations to increase fuel prices despite an increase in the global market.

However, last week, the government announced an unprecedented increase of 43 per cent and 55pc in the prices of petrol and high-speed diesel, respectively. But just a day later, PM Shehbaz had slashed the petroleum levy by Rs80 per litre and bringing the price of petrol down to Rs378 per litre.