Petrol strike: Contacts between govt, dealers’ association raise hope

The federal government and the Pakistan Petroleum Dealers Association (PPDA) have finally opened channels for talks to end a nationwide strike by petrol pump owners.

Although Federal Energy Minister Hammad Azhar termed PPDA demand for increasing the dealers’ margin to 6% as “illegitimate,” offers have been made from both sides to end the deadlock.

PPDA Chairman Abdul Sami Khan told SAMAA Digital that the government has finally contacted them and the association was open to negotiating with a government team.

Petroleum dealers had earlier complained about a lack of contacts from the government.

 “I talked to the Secretary Petroleum Division Arshad Mahmood about the issue for an hour,” Khan said.

Offers on the table

Sami said he had presented his suggestions to the secretary, who would talk to the Energy Minister Hammad Azhar.

PPDA Chairman revealed he has proposed that if the government agrees to increase the dealers’ margin gradually over the next six months, they may call off the strike.

Petroleum dealers are demanding that their profit be increased to 6% from the current 3%.

Energy Minister Azhar on Thursday said that such an increase meant dealers would be earning Rs9 per litre, an amount, he termed “illegitimate” or unjust.

Petroleum dealers currently earn Rs3.91 on petrol and Rs3.30 on diesel per litre. Their margin was last increased in April by about 20 paisas per litre, but dealers say in view of rising operational expenses the margin was inadequate.

Azhar said the increase would benefit only some groups.

“Legitimate demands will be accepted, illegitimate ones will be not,” he said speaking to SAMAA TV

He added that Economic Coordination Committee (ECC) will decide in respect of a margin increase in the next few days.

Later in a tweet, Azhar confirmed that the government was in contact with PPDA.

“We have been negotiating with petroleum dealers for the last three weeks and a summary of margin increase has been sent to the Economic Coordination Committee,” he said.

We are in touch with petroleum dealers association. A summary regarding revision of their margins has already been tabled in ECC and a decision will be taken in its next session.

— Hammad Azhar (@Hammad_Azhar) November 24, 2021

Meanwhile, some reports suggest that the government had offered to slightly increase dealers profit. In the past, it had offered an increase of 85 paisas on petrol and 60 paisas on diesel. Now it has increased the offer to Re1 on petrol and 70 paisas on diesel.

Petroleum dealers have also held a meeting with Oil Companies Advisory Council (OCAC) in Karachi, SAMAA TV‘s Rizwan Alam reported.

The OCAC told the dealers that a summary for the increase in margin has been moved, he said.

Petroleum Division’s spokesperson on Wednesday night had said that the case to increase the margin for petrol pump owners has been sent to the Economic Coordination Committee. The statement was repeated by Azhar on Thursday.

When pumps may reopen

Hammad Azhar claimed that more petrol pumps would reopen by Thursday evening.

He also said that the company-owned company-operated (COCO) pump of oil companies were catering to consumers.

However, a SAMAA Digital reported earlier that fewer than expected COCO pumps were operational.

Only PSO and Shell were able to publish lists of their COCO pumps that opened on Thursday.

The Oil and Gas Regulatory Authority (Ogra) on Wednesday instructed oil companies to ensure supply after the Pakistan Petroleum Dealers Association (PPDA) announced that it would go ahead with its strike call.

Crucially, formal negotiations between PPDA and the government have not started yet. Nevertheless, contacts between the parties are the first step and have raised hope for the end of deadlock.