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Petroleum dealers threaten strike

Petroleum dealers threaten strike

Express Tribune6 days ago

Petroleum Division said that it had received an application from Mari Petroleum Company for approval of Declaration of Commerciality and Field Development Plan for Hilal and Iqbal discoveries. PHOTO: file
The Pakistan Petroleum Dealers Association (PPDA) has rejected the proposed amendment to the Petroleum Act of 1934 that gives additional powers to the civil bureaucracy to monitor petroleum dealers and threatened a nationwide strike.
PPDA Chairman Abdul Sami Khan on Saturday addressed a press conference at the Karachi Press Club alongside other officials, including association leader Malik Khuda Bakhsh.
Khan said that the federal government's amendments to petroleum laws are unacceptable and that the association will adopt a strict stance against changes to the Petroleum Act of 1934.
He said the amendments would grant additional powers to assistant commissioners (ACs) and deputy commissioners (DCs) rather than the regulator, the Oil and Gas Regulatory Authority (OGRA).
"A meeting with the petroleum minister is scheduled for Monday, May 26, to discuss the proposed amendment. If our demands are not met during the meeting, we will proceed with a nationwide strike," he said.
He acknowledged the need for legal changes to curb petroleum smuggling but expressed concern that fuel dealers would end up being unfairly targeted. "Despite assurances from the government, petroleum margins have not been increased for several years," he added.
Malik Khuda Bakhsh said that under the proposed amendment to the Petroleum Act, ACs and DCs would have the authority to investigate any issues involving fuel stations. He said a fuel pump caught fire in the Shah Faisal area of Karachi and it was later discovered that the license had been issued by a DC.
"This is an outdated law, and such powers should rest with a regulator like OGRA," he argued.
Another association member, Raja Waseem, said that such extensive powers should not be handed to the bureaucracy. "Decisions made behind closed doors involve only oil marketing companies (OMCs), while we, the dealers, are excluded," he said.

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Petroleum dealers threaten strike
Petroleum dealers threaten strike

Express Tribune

time6 days ago

  • Express Tribune

Petroleum dealers threaten strike

Petroleum Division said that it had received an application from Mari Petroleum Company for approval of Declaration of Commerciality and Field Development Plan for Hilal and Iqbal discoveries. PHOTO: file The Pakistan Petroleum Dealers Association (PPDA) has rejected the proposed amendment to the Petroleum Act of 1934 that gives additional powers to the civil bureaucracy to monitor petroleum dealers and threatened a nationwide strike. PPDA Chairman Abdul Sami Khan on Saturday addressed a press conference at the Karachi Press Club alongside other officials, including association leader Malik Khuda Bakhsh. Khan said that the federal government's amendments to petroleum laws are unacceptable and that the association will adopt a strict stance against changes to the Petroleum Act of 1934. He said the amendments would grant additional powers to assistant commissioners (ACs) and deputy commissioners (DCs) rather than the regulator, the Oil and Gas Regulatory Authority (OGRA). "A meeting with the petroleum minister is scheduled for Monday, May 26, to discuss the proposed amendment. If our demands are not met during the meeting, we will proceed with a nationwide strike," he said. He acknowledged the need for legal changes to curb petroleum smuggling but expressed concern that fuel dealers would end up being unfairly targeted. "Despite assurances from the government, petroleum margins have not been increased for several years," he added. Malik Khuda Bakhsh said that under the proposed amendment to the Petroleum Act, ACs and DCs would have the authority to investigate any issues involving fuel stations. He said a fuel pump caught fire in the Shah Faisal area of Karachi and it was later discovered that the license had been issued by a DC. "This is an outdated law, and such powers should rest with a regulator like OGRA," he argued. Another association member, Raja Waseem, said that such extensive powers should not be handed to the bureaucracy. "Decisions made behind closed doors involve only oil marketing companies (OMCs), while we, the dealers, are excluded," he said.

Pakistan govt set to slap GST on POL products, hike petroleum levy
Pakistan govt set to slap GST on POL products, hike petroleum levy

Business Recorder

time21-05-2025

  • Business Recorder

Pakistan govt set to slap GST on POL products, hike petroleum levy

ISLAMABAD: The government has reportedly decided to increase the petroleum levy from Rs80 to Rs90 per litre and to impose a 3–5 percent General Sales Tax (GST) on petroleum products to support local refineries, well-informed sources told Business Recorder. The move also aims at ensuring the timely implementation of fortnightly petroleum price revisions. The decision was taken by the Economic Coordination Committee (ECC) of the Cabinet on May 13, 2025, and was subsequently ratified by the Federal Cabinet on May 20, 2025. During a briefing to the ECC, the Petroleum Division explained that petroleum products—including Mogas, diesel, kerosene, and light diesel oil (LDO)—had been classified as 'exempt' under the Finance Act 2024-25. As a result, input sales tax became a cost burden for refineries and Oil Marketing Companies (OMCs), amounting to approximately Rs34 billion for FY 2024-25. Last 3-1/2 months of FY25: petroleum levy hike by Rs18.02 to generate Rs90bn revenue This cost cannot be passed on to consumers due to government-regulated petroleum pricing, which is determined by the Oil and Gas Regulatory Authority (OGRA) under federal policy. A draft proposal to levy a 3–5 percent GST on motor spirit (MS) and high-speed diesel (HSD) was developed in consultation with the oil industry, the Ministry of Finance, and the Federal Board of Revenue (FBR). However, it could not be implemented due to the lack of agreement with the International Monetary Fund (IMF) on taxing these products at reduced GST rates. Applying the standard 18 percent GST would result in a price increase of approximately Rs45 per litre for MS and HSD, which the government considers undesirable. Any change to the GST rate would require prior consultation with the IMF and approval from Parliament. In addition to the GST matter, the ECC also approved an increase in margins for OMCs and petroleum dealers by Rs1.13 and Rs1.40 per litre, respectively, to ensure the sustainability of the oil supply chain. OGRA's initial recommendations on the matter were reviewed, and certain amendments were made before final approval. To partially address the financial issue of the refineries, OMCs and Dealers, the following proposals were submitted for consideration: (i) since the petroleum products (Mogas, Diesel, Kerosene and LDO) are exempted from sales tax during current financial year, the refineries and OMCs' unadjusted sales tax during July 2024-June 2025 of these products may be compensated through IFEM (estimated Rs34 billion). The amount may be recovered in 12 months and recovery of this item will cease from the 13th month automatically; (ii) for FY 2025-26, 3-5 percent sales tax Mogas/HSD products may be imposed through Finance Act, however, in case the products remain exempted from sales tax in the FY 2025-26, the unadjusted sales tax may continue to be compensated through IFEM as a fall back option to keep the oil supply chain sustainable; (iii) the margins of OMCs and Petroleum Dealers may be enhanced to keep their business sustainable; and (iv) OGRA will develop a mechanism for adjustment of GST claims for above period and effective utilization of digitization cost along-with implementation timelines within one month of approval. Full cost of the digitization will be borne by OMCs throughout the supply chain including outlets. The Petroleum Division further briefed the forum that on the basis of these proposals, indicative impact on prices of MS and HSD will be as follows: (i) refinery and OMCs' unadjusted sales tax (Rs28 billion for July-April, 2024-25) and (Rs6 billion for May –June, 2025) recovery timeframe at Rs1.87 per litre; (ii) OMCs margins (including digitization cost) will have an impact of Rs1.13 per litre; and (iii) Petroleum Dealer's Margin, Rs1.12 per unit. Total impact will be Rs4.12 per litre. However, after discussion, the ECC decided that OMCs' and Refineries unadjusted sales tax of FY25 may be compensated from May 16, 2025, through IFEM (estimated Rs34 billion to be verified by OGRA). The amount may be recovered till end of FY26 on the following rates and recovery of this item will cease subsequently after: (i) HSD sales tax adjustment at Rs2.09 per litre; and (ii) Mogas, Rs1.07 per litre. Copyright Business Recorder, 2025

Ogra decides to change prescribed gas prices
Ogra decides to change prescribed gas prices

Business Recorder

time21-05-2025

  • Business Recorder

Ogra decides to change prescribed gas prices

ISLAMABAD: Oil and Gas Regulatory Authority (OGRA) on Tuesday decided to raise the prescribed price of natural gas for Sui Northern Gas Pipeline Limited (SNGPL) by Rs 116.90 per mmbtu and Rs 103.95 per mmbtu reduction in gas prices for Sui Southern Gas Company (SSGC) with effect from July 1, 2025. Oil and Gas Regulatory Authority (OGRA) took decisions on Tuesday on the Estimated Revenue Requirement (ERR) both gas companies for fiscal year 2025-26. Both determinations have been sent to Federal Government for receipt of category-wise natural gas sale price advice in 40 days as per OGRA ordinance. Increase in prescribed price for SNGPL is mainly due to the impact of RLNG diversion made in pursuance of Federal Cabinet decision dated October 30, 2023 that include the cost of RLNG in the determination of revenue requirement so that appropriate and cost recovery measures could be taken by the government moving forward in advising category wise consumer sale prices. The Authority has directed SNGPL to immediately take up the matter for review of gas supply management with Federal Government, taking into account the sectoral energy demand, international contractual obligations and macro-economic factors. The petitioner (SNGPL) total operating income is estimated at Rs 509,814 million as against the net revenue requirement of Rs 534,457 million and thus there is shortfall of Rs 43 billion for its ERR for the said year, thereby determining the average prescribed price at Rs 1895.25 per mmbtu. SSGCL has demanded Rs 2398.90 per mmbtu raise in gas price, however, the authority has allowed Rs 103.95 per mmbtu reduction for the said year. Copyright Business Recorder, 2025

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