After hours of negotiations, the government decided to increase the profit margin on petrol and diesel by Rs1.64 per litre in order to persuade petroleum dealers to call off the strike they threatened last week.
Abdul Sami Khan, Chairman of the Pakistan Petroleum Dealers Association (PPDA), announced the agreement.
The government recommended an increase in dealer margins of Rs1.64 per litre.
The dealers, who had first requested an increase of Rs5 per litre, initially objected to this rise as “insufficient” in light of the higher cost of doing business.
They did, however, accept the offer afterwards.
The rise in dealers’ margins will be applied to the consumer price in four phases.
It will be raised by Rs.0.41 per litre every fortnight, and the dealers will receive a full raise of Rs1.6 per litre in two months, bringing the dealers’ margin to Rs7.6 per litre after 2 months from the current Rs6 per litre.
Last week, the petrol pump owners’ representative, PPDA, announced shutting down fuel pumps across the country from July 22, demanding an increase in profit margins amid an inflation crisis.
In a statement, the association said the State Minister for Petroleum, Musadik Malik, was informed about their concerns but to no avail.
The official communique said interest rates and inflation had hit operators’ businesses and called for the dealership margin to be increased.
It claimed that sales had dropped by 30% as a result of Iranian petroleum being smuggled into the nation.
The PPDA rescheduled its strike for two days the next day after representatives of the association met with the petroleum minister, who arrived in Karachi on Friday to persuade the PPDA to put off the statewide strike.