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Business Recorder
03-05-2025
- Business
- Business Recorder
PPDA urges govt to resolve its demands
KARACHI: Pakistan Petroleum Dealers Association (PPDA) has highlighted issues over deregulation, bank charges, and dealer commissions, urging immediate government action in the meeting of the Standing Committee on Energy (Petroleum Division) held earlier this week. Senior Vice Chairman Malik Khuda Baksh, representing PPDA Chairman Abdul Sami Khan, presented key policy recommendations in the meeting while highlighting the financial struggles of petroleum dealers nationwide. He was accompanied by PPDA's Vice Chairman Raja Waseem, and members Ch Zafar Elahi and Faisal Arif. Malik Khuda Baksh said among the major issues discussed were the proposed deregulation of the petroleum sector, which PPDA insists not to proceed without their consultation and the heavy burden of credit card charges cutting into dealers' profits. Additionally, the association pushed for a long-pending increase in dealer commissions, citing rising inflation and operational costs, he added. On deregulation of Petroleum Products, Khuda Baksh briefed the committee that a high-level meeting was held at PSO House in Karachi, which was attended by former Petroleum Minister Musadik Malik, OGRA Chairman Masroor Khan, Director General (Oil), MD PSO, and a PPDA delegation led by Chairman Abdul Sami Khan. Deregulation of the petroleum industry was discussed in detail, and assurances were given that no decision would be made without the consultation of the PPDA and its chairman. He requested the Committee to defer the deregulation matter until the next session due to Abdul Sami Khan's illness. He assured that PPDA would submit its written recommendations before the next meeting. The Committee agreed and instructed PPDA to submit its proposals in writing. Khuda Baksh also raised concerns over excessive bank charges that are severely impacting fuel retailers' profits and proposed two solutions: either the State Bank should intervene to reduce transaction fees, or dealers should be allowed to pass these charges to customers, as is common internationally. The committee agreed to revisit the issue in the next session after reviewing global practices. On the issue of dealer commissions, he pushed for a long-pending increase, citing rising inflation. While OGRA had approved a Rs. 1.40 per liter hike eight months ago, it remains unimplemented. The association demanded a fresh review for the commission based on current economic conditions, which the committee and Petroleum Minister agreed to consider. PPDA Vice Chairman Raja Waseem also briefed officials on the ongoing problem of fuel smuggling, which continues to hurt legitimate businesses. Authorities acknowledged the issue but noted a recent decline due to government crackdowns. Khuda Baksh informed that the meeting concluded with key decisions: the deregulation of petroleum products will be discussed in the next session after the PPDA submits written recommendations, while bank charges and dealer commissions will also be revisited. With profit margins shrinking and policies delayed, petroleum dealers are now waiting for concrete action to safeguard their businesses. Copyright Business Recorder, 2025
Business Recorder
03-05-2025
- Business
- Business Recorder
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. Copyright Business Recorder, 2025
