Dealer margin adds Rs1.34 to petrol, diesel prices

ISLAMABAD:

The dealers' margin on petrol and diesel—which the government increased from Rs8.64 to Rs9.98 per litre last week—has effectively added Rs1.34 to the cost borne by consumers.

According to documents, the revised dealer margin has been incorporated into the latest increase in petroleum product prices. Had the margin not been increased, consumers could have received relief of Rs1.34 per litre.

The documents also show details of taxes and other charges imposed on petrol and diesel.

For August 22, the ex-refinery price of diesel stood at Rs231.30 per litre. Diesel carries a petroleum levy of Rs80 per litre, in addition to a Rs5-per-litre carbon surcharge levy.

An IFEM—Inland Freight Equalization Margin—charge of Rs3.94 per litre is also imposed on diesel, while a distributor margin of Rs7.87 per litre is charged separately.

The total taxes and charges on diesel amount to Rs106.79 per litre, according to the documents. The ex-refinery price of petrol for August 22 was also Rs231.30 per litre.

Petrol carries a levy of Rs80 per litre and a carbon surcharge levy of Rs5 per litre. An IFEM charge of Rs7.44 per litre is also imposed, along with a distributor margin of Rs7.87 per litre. The total taxes and charges on petrol amount to Rs110.29 per litre, according to the documents.

The government on August 14 increased profit margins of petrol pump owners by 15.5% in a hurriedly called virtual meeting to avert a strike, as it withdrew a decision to link profits with sales digitisation, partially rolling back an initiative aimed at checking sales of smuggled fuel.

With no member present in the meeting room, the Economic Coordination Committee (ECC) of the Cabinet approved an increase in the dealers' margin on sales of petrol and diesel by Rs1.34 per litre.

With this decision, the existing profit margin of Rs8.64 per litre jumped to Rs9.98.

The dealers had threatened a countrywide strike starting August 15.