ISLAMABAD: Rejecting the proposed complete deregulation of oil pricing, the petroleum dealers on Saturday threatened to go on strike across the country, saying that the new anticipated formula—that will end fixed dealer margin—is not suitable in Pakistan.

Expressing dismay over the new proposal, the Pakistan Petroleum Dealers Association (PPDA) organised a seminar here and slammed the Oil and Gas Regulatory Authority (Ogra) for not consulting the petrol pump owners and operators in this regard.

PPDA Chairman Abdul Sami Khan said that petroleum dealers—who are a key stakeholder in the whole chain—would go on a countrywide strike if Ogra did not consult them before taking any final decision.

The government has suggested that the sale of petroleum products may be deregulated completely as in Europe and the US, he said, adding that the proposed mechanism was not suitable and applicable to Pakistan due to different ground realities.

Says new mechanism will end fixed dealer margins

He claimed that complete deregulation would result in negligible official or government interference in business and that all companies, including petrol stations, would be free to set their own prices.

“This system has worked well in advanced countries, but if the dealers’ and company margins are not set by the government, there is a chance that some petrol pumps will lower their rates, and those operating in rented spaces will be unable to compete. Similarly, petrol pumps in urban areas will lose money due to higher overheads compared to pumps in rural and sub-urban areas,” Mr Khan said.

The PPDA chairman slammed Ogra for not consulting the dealers regarding the proposed deregulation of prices of petroleum products.

He added that the association would not accept the proposed deregulation of prices of petroleum products and would prefer to go on a nationwide strike if their demands are not met and they are not consulted before taking any final decision.

In his address, former prime minister Shahid Khaqqan Abbasi—who is working on the new mechanism—supported the idea of deregulating the prices of petroleum products.

Mr Abbasi said that he was against the current mechanism of petroleum price determination, but at the same time, the government had no link with the oil price determination, as it was under the domain of Ogra.

He said petroleum dealers should earn a rightful profit from their businesses instead of indulging in unethical and illegal practises such as adulteration and lower measuring.

“We feel that if the dealers were given their rightful profit, then they would avoid indulging in any illegal practice,” Mr Abbasi said.

He added that the government has approved due commission for the dealers and it is hoped that they would earn the rightful earnings from their businesses.

Speakers also demanded that the government immediately take measures to stop the illegal smuggling of oil from Iran as the government is not earning revenue from the smuggling of oil while it is ruining petroleum dealers’ businesses.

On the occasion, PPDA Islamabad District President Raja Waseem Kianai said Ogra should advise provincial chief secretaries to immediately take strict action against illegal petrol stations and agencies.

The seminar was attended by PPDA office bearers from Punjab, Sindh, Balochistan, Khyber Pakhtunkhwa, Gilgit-Baltistan, and Azad Jammu & Kashmir.

Published in Dawn, September 11th, 2022