ISLAMABAD - Federal cabinet’s Economic Coordination Committee (ECC) would take final decision about the margin of oil dealers on petroleum products (POL) soon as petroleum ministry is set to dispatch a summary to ECC within five to seven days.
Official sources privy to the development told The Nation that a meeting between high-ups of petroleum ministry and leaders of All Pakistan Petroleum Dealers Association was held here under the chair Minister for Petroleum and Natural Resources Shahid Khaqqan Abbasi on last Thursday. Pakistan Institute of Development Economics (PIDE) shared the final draft of its study on the margin of petroleum dealers with the meeting. However, senior stalwarts of petroleum dealers association have expressed their disagreement with the recommendations of PIDE pertain to increase in the margin of petroleum dealers. The dealers have demanded more increase in their margin on petrol and diesel while the ministry is also inclined to accommodate both the important players in the transportation of the POL products up country. Now the ECC would take final decision in this regard in near future to settle the pending demand of dealers, they added.
Quoting the recommendations of PIDE regarding increase in the margin of dealers, the sources further told that currently the expense of oil dealers on petrol and diesel is Rs2.78/litre. There should be increase in the margin of the dealers by 65 paisas on petrol while 80 paisas increase on diesel. The dealer’s margin is also part of the price of POL products, which means that consumers pay the margin and now they will pay more if the ECC approves increase. At present the margin of oil dealers on petrol is Rs 2.76/litre while it is of Rs2.30/litre on diesel. And, last year the margin of dealers was increased by Re 0.50 per litre on petrol and Re 0.70 per litre on diesel.
The sources further told that petroleum dealers, during the course of crucial talks with top mandarins of the ministry, have demanded of the government to increase their margin on POL products by Rs4.25/litre on petrol and Rs3.50/litre on diesel.
A senior official at petroleum and natural resources ministry on the condition of anonymity told that the ministry is inclined to increase the margin of oil dealers and oil marketing companies (OMCs). Similarly, the government also interested to increase the margin to accommodate the oil dealers, which are arguing that they are unable to run their businesses on the existing volume of their margin on petroleum products.
“The ECC, in August last year, had accorded its approval to increase the margin of dealers and at that time the Ministry of Petroleum and Natural Resources extended the assurance to dealers that their margins will further be increased in a year,” he added.
The All Pakistan Petroleum Dealers Association was of the stand that business at existing margin is no more feasible for them because of the huge increase in the cost of doing business in the wake of speedy devaluation of Pakistan currency. They cannot purchase petroleum products on existing margin and unable to sell them on petrol pumps. And, they are spending more capital on the purchase of diesel and petrol to meet the demands due to heavy increase in power tariff by Rs6 per unit too.
It is to note here that the ECC is likely to approve increase in the margin of oil dealers, so it is no exaggeration to say that the over burdened masses would bear the brunt of increase in near future.