By Urdu Report Editorial Team
ISLAMABAD: The government has approved an increase of Rs1.34 per litre in the profit margin of petroleum dealers on petrol and High-Speed Diesel (HSD), a decision that could further increase pressure on consumers already facing rising living costs.
The Economic Coordination Committee (ECC) approved the revision in dealers’ margins for Motor Spirit (MS) and HSD, raising the basic dealer margin from Rs8.64 per litre to Rs9.98 per litre.
The decision was taken after petroleum dealers demanded an increase in their margins. Federal Minister for Petroleum Ali Pervaiz Malik, speaking after the ECC meeting, said that an increase of around Rs1.30 per litre had been granted.
ECC approves revision in petroleum dealers’ margins
According to the Ministry of Finance, the ECC meeting was held virtually on Friday under the chairmanship of Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb.
The committee considered a summary submitted by the Petroleum Division regarding revision of dealers’ margins on Motor Spirit and High-Speed Diesel.
After detailed deliberations, the ECC approved the proposed increase.
The meeting was attended by Federal Minister for National Food Security and Research Rana Tanveer Hussain, Federal Minister for Petroleum Ali Pervaiz Malik, Federal Minister for Economic Affairs Ahad Khan Cheema, federal secretaries and senior officials from the relevant ministries and divisions.
Higher margins could add to inflationary pressure
Under the revised arrangement, petroleum dealers will receive a higher margin on every litre of petrol and HSD sold.
Although the government has not announced a corresponding increase in the retail price of petrol or diesel as a direct result of this decision, the higher dealers’ margin could add to the overall cost structure of petroleum products.
For ordinary consumers, any increase in the cost of petroleum products can have wider consequences. Petrol and diesel prices directly or indirectly affect transportation, freight, food distribution, industrial activity and the cost of everyday goods and services.
As a result, consumers could face another wave of inflationary pressure if the additional cost is eventually reflected in retail petroleum prices.
Public burden remains a major concern
The decision comes at a time when household budgets are already under pressure from higher transportation and essential commodity costs.
An increase in petroleum-related costs can potentially create a ripple effect across the economy, as higher transportation expenses are often passed on to consumers through increased prices of food, goods and services.
However, it is important to clarify that the available information does not state that petrol or HSD prices have increased by Rs1.34 per litre as a result of the ECC decision.
The approved amount is specifically an increase in the dealers’ profit margin. The final retail price of petroleum products depends on the government’s overall pricing mechanism and other components included in the petroleum price structure.
More pressure on consumers possible
The latest decision has nevertheless raised concerns about an additional financial burden on consumers. If higher dealer margins are incorporated into future petroleum price calculations, motorists could eventually have to pay more at fuel stations.
Any increase in petrol and diesel prices could also affect public transport fares, freight charges and the prices of goods transported across the country.
The government is therefore likely to face pressure to ensure that the increase in dealers’ margins does not translate into an excessive burden on the public.
