Petroleum deregulation: dealers seek more time for input

KARACHI: Requesting deference of deregulation of petroleum products during the 8th meeting of the Standing Committee on Energy (Petroleum Division), the Pakistan Petroleum Dealers Association (PPDA) on Friday requested more time to submit formal recommendations.

The Committee, chaired by Syed Mustafa Mehmood, MNA, accepted the request made by PPDA’s Senior Vice Chairman Malik Khuda Baksh, who appeared on behalf of the ailing Chairman Abdul Sami Khan. The meeting saw active participation from the Federal Minister for Energy (Petroleum Division), Ali Pervaiz Malik, and included comprehensive deliberations on key challenges faced by petroleum dealers, including deregulation, credit card transaction charges, commission revision, and fuel smuggling.

At the outset, Malik Khuda Baksh presented a bouquet to the Committee Chairman as a gesture of goodwill on behalf of Abdul Sami Khan. He was accompanied by Raja Waseem (Vice Chairman, PPDA), Ch. Zafar Elahi, and Faisal Arif (Members, PPDA).

Deregulation of Petroleum Products Highlighting the matter of deregulation, Khuda Baksh informed the Committee about a high-level meeting held at PSO House, Karachi, attended by then Petroleum Minister Musadik Malik, OGRA Chairman Masroor Khan, Director General (Oil), MD PSO, and a PPDA delegation led by Abdul Sami Khan. In that meeting, the minister assured PPDA that no policy decision on deregulation would be taken without their formal input and recommendation.

Citing the current illness of the PPDA Chairman, Khuda Baksh requested the Standing Committee to defer the matter to the next session. He assured the Committee that the Association would submit its formal recommendations in writing prior to the upcoming meeting. The Committee accepted the request and directed PPDA to provide its views for further discussion.

Credit Card Charges Deduction by Banks: Khuda Baksh also raised the pressing issue of credit card transaction charges deducted by banks. He explained that dealers receive Rs. 8.64 per liter, out of which 0.8% to 1% — approximately Rs. 2.10 per liter — is deducted by banks. After covering staff salaries, utility bills, local taxes, and other expenses, dealers are left with just Rs. 3 per liter, making business operations financially unviable.

He added that despite repeated follow-ups with the State Bank of Pakistan under the leadership of Abdul Sami Khan, no concrete decision has been taken. Khuda Baksh proposed two solutions: either direct reduction of bank charges through a State Bank circular or allowing dealers to pass these charges onto customers, as practiced internationally. The Committee Chairman asked PPDA to submit international evidence and practices in this regard at the next meeting.

Dealers’ Commission on Petroleum Products: On the issue of commission, Khuda Baksh requested that Ch. Zafar Elahi be allowed to present PPDA’s detailed proposal. Elahi stated that PPDA’s initial demand was an increase of Rs. 2.80 per liter in dealers’ commission, later revised to Rs. 2.10 after consultations with OGRA. Although OGRA approved Rs. 1.40 per liter increase nearly eight months ago, implementation is still pending.

Elahi emphasized that rising inflation and increased operational costs have made it difficult for dealers to survive. He requested the Committee to recalculate the commission demand based on current economic indicators and allow PPDA to present a revised proposal in the next session. The Committee and the Minister agreed to the request.

Smuggling of Petroleum Products: Vice Chairman Raja Waseem briefed the Committee on the ongoing issue of petroleum product smuggling, which continues to affect local dealers.

The Committee Chairman and the Federal Minister acknowledged the concern, noting that the volume of smuggling is decreasing due to targeted government efforts. They assured that the matter remains a part of the government’s enforcement agenda.