Petroleum dealers demand increase in commission

Petroleum dealers on Friday resented the decision by the Economic Co-ordination Committee (ECC) to fix petroleum dealers' commission at 5 percent of ex-factory rate, which is Rs 23.40 per litre. Talking to Business Recorder, Bashir Akbar, vice-chairman of Pakistan Petroleum Dealers Association (PPDA), said that the ECC rate was just 2 percent of overall cost to dealers, while earlier it was calculated at 4 percent of cost to dealers.
He said that the association kept on pressing the government to increase dealers' commission to five percent on total cost to dealers. However, the government connived at it, bypassed dealers' demand, and increased the commission to five percent. This was, however, not at cost to dealers, which was in fact only 2 percent of actual commission. He said that total cost of petrol to dealers was Rs 57.14 per litre after including Rs 27.50 charged as petroleum development levy (PDL) per litre, Rs 7.972 sales tax, Re 0.115 as service station licence fee, and Re 0.083 on account of withholding tax.
He said the government should increase the rate of dealers' commission to eight percent, in case they decide to give it on ex-factory rate; else, it should be given at cost to dealers. He said the commission on petrol has declined from Rs 1.46 per litre to only 60 paisa due to swift decline in the global market, as dealers were facing hardships to meet operational expenses. Several petrol pumps are not earning profits, he said.
Keeping this in view, the association has decided to raise the issue again before concerned authorities and has asked them to restore the commission which was necessary for survival of the industry, he said. As against dealers' demand for a higher commission, they are still getting below Re 1 as commission, which is not justified, he added.
He said that petroleum dealers charge 0.75 percent evaporation charges at every litre, which was approved by the authority concerned, but after the recent decision, the evaporation charges were included in dealer's commission, which was disappointing for them.
He said that the decline in the commission has discouraged dealers to invest further towards the development of petroleum sector. It may be pointed out that petroleum dealers' commission was also cut by 79 paisa last year, which was later restored after strong reaction shown by petroleum dealers, who stopped selling gasoline products for two days.