KARACHI: The negotiations between petroleum dealers and the government on product margins have been successful, BOL News reported.

Petroleum Dealers Association held two rounds of talks with the representatives of the Petroleum Division at PSO House after threatening to go on strike and shut down pumps if their demands were not accepted.

Both sides have written an agreement which will be signed by the Ministry of Petroleum, Oil and Gas Regulatory Authority (OGRA), and the Pakistan Petroleum Dealers Association (PPDA).

According to the agreement, the petroleum dealers will receive a phased increase in product margins.

The Ministry of Petroleum has recommended an increase in product margin by Rs.1.64. The dealers finally agreed after extensive negotiations and initial refusal for several hours.

The product margin will be increased in four phases every fortnight instead of a single time. The dealers will receive an increase in profit margin by 41 paisas after every 15 days. The complete proposal will be available in two months.

On Friday, the petroleum dealers deferred their strike after the government agreed to increase the dealers’ profit margin.

The dealers had demanded the government double their profit margin from the current level of 2.4 percent to 5 percent. This amounts to Rs12 per litre at the current petrol prices.

The dealers said the dealer’s commission on petrol has completely evaporated due to high inflation and interest rates. The dealers said the margin was fixed Rs6 per litre which was insufficient.

Musadik Malik had earlier stated that the government would collect petroleum sales data from 2,000-3,000 petrol pumps to determine appropriate profit margins.

This data-based decision aims to avoid criticism ahead of the next parliamentary elections scheduled for later in 2023.