Government, petroleum dealers reach agreement on fuel relief package

The government and petroleum dealers on Thursday reached an agreement on the payment mechanism for the Rs100 per litre subsidy under the Petrol Relief Package, ending a deadlock that had threatened its implementation.

The agreement was reached during an emergency meeting between the Ministry of Petroleum and the Pakistan Petroleum Dealers Association (PPDA), convened to address dealers’ concerns over reimbursement of the subsidy.

According to the PPDA, payments due to petroleum dealers under the relief package will be processed through the State Bank of Pakistan and transferred to the respective dealers’ bank accounts within 48 hours. The government is expected to issue a formal notification regarding the payment mechanism shortly.

The meeting was held virtually and attended by PPDA Chairman Malik Khuda Baksh, Vice Chairman Tariq Hassan, Anwar Kamal and Malik Sher Khan, while PPDA Sindh President Ameer Khan participated through Zoom.

Following the agreement, the PPDA said petroleum dealers had started implementing the government’s relief package.

The development comes after the PPDA had earlier refused to implement the package, citing the absence of a clear mechanism for reimbursement of the subsidy.

Earlier on Thursday, PPDA Chairman Malik Khuda Baksh told Business Recorder that the Ministry of Petroleum had contacted the association and called an online meeting to brief dealers on the subsidy reimbursement mechanism and address their concerns.

The government has announced a Rs100 per litre subsidy for motorcycles, Chingchi rickshaws, rickshaws and cars with engine capacity of up to 800cc, registered after January 1, 2011, under the Petrol Relief Package.

The scheme was scheduled for nationwide implementation from September 17.

The PPDA had maintained that dealers were not taken into confidence before the package was announced and had sought consultations on a transparent payment mechanism.

Speaking at an earlier press conference, Khuda Baksh had said petrol stations would not sell fuel under the relief package unless an acceptable subsidy payment mechanism was agreed upon with the association.

The PPDA said the Petroleum Minister also assured dealers that consultations with all stakeholders would be strengthened and made more effective in the future.

The association expressed hope that timely implementation of the agreed payment mechanism would address dealers’ concerns and facilitate smooth implementation of the relief package nationwide.