Pakistan Government and Petrol Pump Owners Reach Agreement, Strike End

In the latest news, the government of Pakistan and petrol pump owners have come to an agreement to prevent a strike. The dealers had threatened to close their petrol pumps to protest their profit margins, asking for a 5% increase to help with their finances. After a long seven-hour meeting, both sides reached a compromise and found a solution.

As part of the agreement, the government agreed to increase the dealers’ profit margins by Rs. 1.64 per liter for both petrol and diesel. To ease the impact on consumers, this increase will be implemented gradually in four equal parts of Rs. 0.41 per liter over two m,onths. The phased approach will begin on August 1, 2023, and finish in mid-September 2023. This gradual increase is aimed at avoiding a sudden and steep hike in petrol and diesel prices, which could put further strain on the already struggling population dealing with inflation.

Malik Khuda Baksh, the former chairman of the Pakistan Petroleum Dealers Association (PPDA), revealed that the initial increase in profit margins will start on August 1, 2023, with subsequent increments leading up to mid-September 2023. While the dealers initially wanted a 5% raise, they eventually agreed to the government’s offer, even though it fell short of their demand, to avoid going on strike and causing more disruptions.

The agreement reached during the lengthy meeting was officially signed by the chairman of the Oil and Gas Regulatory Authority (OGRA), the director general of oil, and the PPDA chairman. Despite finding common ground, the petrol pump owners still have concerns about their overall profitability, especially with the current surge in inflation and low sales, which are major challenges affecting their businesses.

Before the agreement, the strike was postponed after State Minister for Petroleum Musadik Malik met with the dealers and promised to review their profit margins. The government offered an increase of Rs. 1.64 per liter, and this offer remained unchanged throughout the meeting, despite the dealers’ protests.

While the petrol pump owners are relieved by the agreement, it appears that the LPG (liquefied petroleum gas) dealers are preparing for a strike of their own on August 5 and 6. However, the Pakistan LPG Marketers Association (PLPGMA) has distanced itself from this strike, stating that it would worsen the difficulties faced by consumers. Instead, the PLPGMA has pledged to keep their outlets open and accused the strike organizers of hoarding LPG to sell at higher prices.