Dealers urge govt to raise profit margins on petrol, diesel

Petroleum dealers have urged the government to honour the long-overdue promise of raising their profit margins on petrol and diesel sales by Rs1.40 to Rs2.20 per litre. According to reports, this commitment has remained unfulfilled since the start of the current fiscal year (FY).

This request was made during a session of the National Assembly’s Standing Committee on Petroleum, chaired by Syed Mustafa Shah. The committee called upon the Petroleum Division, the Oil and Gas Regulatory Authority (Ogra), and the Pakistan Petroleum Dealers Association (PPDA) to submit comprehensive reports so that a resolution could be reached.

The PPDA voiced its dissatisfaction over the delay, highlighting that in September 2023, the Economic Coordination Committee (ECC) had approved a phased margin increase of Rs1.64 per litre for fuel station owners and Rs1.87 per litre for oil marketing firms. According to reports, the aforementioned calculations were made with Pakistan State Oil’s cost structure in mind.

Moreover, the government had reportedly pledged to adjust these margins annually in line with inflation. However, inflation has remained subdued, with inflation levels dropping to 0.7 percent in March 2025.

Reports indicate that earlier this year, dealers proposed raising their margins by Rs2.20 per litre, while Ogra suggested a smaller hike of Rs1.40 per litre on the current margins of Rs7.87 for dealers and Rs8.64 for marketing firms. Despite these recommendations, no official notification has been issued throughout FY 2024-25.

During discussions, the idea of transforming CNG outlets into petrol stations was briefly mentioned. Petroleum Minister Ali Pervaiz Malik responded that such conversions could be considered individually within the scope of current energy policies, which would not be immediately revised. Reports suggest that the committee postponed further discussions on this matter to a later meeting.

Responding to inquiries about fuel quality and pricing concerns, the minister acknowledged challenges linked to GST and LPG profit structures. He assured the committee that Ogra was responsible for oversight in these areas and that relevant matters would be addressed in the upcoming national budget.

Ogra Chairman Masroor Khan noted that petroleum product prices are reviewed bi-monthly, subject to government approval, and that the state-run PSO currently fulfils about half of the country’s fuel demand.