The Pakistan Petroleum Dealers Association (PPDA) has formally backed the government’s plan to implement a daily petroleum pricing mechanism. During a meeting with Minister for Petroleum Ali Pervaiz Malik, association representatives agreed to the shift, which the government intends to use to increase market transparency and reduce hoarding.
Daily Pricing Mechanism and Market Oversight
According to Minister Ali Pervaiz Malik, the new daily pricing system will rely on a seven-day rolling average to determine fuel costs. This methodology mirrors the previous weekly system, which also utilized a seven-day average. The government asserts that moving to daily adjustments will help discourage market distortions and curb the practice of hoarding petroleum products. The PPDA delegation, which included Chief Adviser Malik Khuda Bakhsh, Raja Waseem Kiani, Chaudhry Zafar Elahi, Babar Ali Chaudhry, and Chaudhry Faisal Arif, signaled its support for this reform agenda during the discussions.
Recognition of Supply Continuity
The meeting also served as a venue for the PPDA to acknowledge the government’s performance during recent geopolitical tensions. Chief Adviser Malik Khuda Bakhsh credited the administration with maintaining an uninterrupted supply of petroleum products throughout the crisis at the Strait of Hormuz. He noted that the government successfully prevented fuel shortages despite the regional instability, an effort the delegation formally recognized during their session with the Minister.
Regulatory Framework and Dealer Margins
Looking ahead, the government and the dealer association are set to address industry-specific financial and regulatory concerns. The PPDA has requested that dealers be included in the formal process of drafting regulations that govern both dealers and Oil Marketing Companies. Minister Malik has provided assurance that these views will be integrated into the regulatory framework.
A primary point of contention remains the dealers’ profit margins, with the association demanding an increase to eight percent. While Minister Malik stated that the request would be given due consideration, a concrete resolution is pending. A meeting between the PPDA and the Oil and Gas Regulatory Authority has been arranged for tomorrow to negotiate these margins and other outstanding industry issues.