Dealers seek 8% margin amid daily fuel pricing

Petroleum minister pushes for market-driven fuel rate reforms

ISLAMABAD:

Federal Minister for Petroleum Ali Pervaiz Malik held a meeting with a delegation of the Pakistan Petroleum Dealers Association (PPDA), led by Chief Adviser Malik Khuda Baksh, to discuss petroleum pricing reforms, deregulation, and matters concerning petroleum dealers.

The PPDA delegation appreciated the government's effective management of petroleum product supplies during the challenges arising from the Strait of Hormuz crisis. They commended the Ministry of Petroleum for ensuring uninterrupted fuel availability across the country despite regional uncertainties.

Malik Khuda Baksh said that while several neighbouring countries experienced law and order situation due to petroleum shortages, Pakistan successfully maintained smooth supplies through timely and effective measures. He assured the minister of the association's full support for the government's policy.

The minister told the delegation about the transition from weekly to daily petroleum price announcements, explaining that the new mechanism would be based on a seven-day rolling average of international prices. He emphasised that the previous weekly pricing mechanism was also based on a seven-day average price, and that the new system would simply update prices on a daily basis to enhance transparency, reduce market distortions, and better reflect international price movements. The PPDA expressed its support for the proposed mechanism.

Ali Pervaiz Malik stated that the government was moving towards a market-driven pricing system to promote transparency and protect consumers. He noted that periodic price announcements had increasingly provided room for market manipulation and hoarding, creating unnecessary distortions. The shift to daily pricing based on a seven-day rolling average, he said, would discourage such practices while ensuring a smoother and more transparent pricing regime.

The PPDA delegation requested that petroleum dealers be consulted during the formulation of rules and operational modalities between oil marketing companies (OMCs) and dealers. The minister assured the delegation that their views would be duly considered.

The delegation also raised the issue of pending revision in dealers' margins and requested that margins be increased to 8%. The minister stressed that progress would be made on the matter and arranged a meeting between PPDA representatives and Ogra on Tuesday to discuss the matter and other concerns in detail.