Printer Friendly

Dealers margin needs upward revision - Malik.

The Vice Chairman of Pakistan Petroleum Dealers Association, Mr. Malik Khuda Buksh (51) did Graduation from Govt. College Lahore and Automobile Engineering from England. He is the Managing Director of Malik Enterprises (Pvt.) Ltd. besides being a proprietor of several Petrol Pumps in the city. He is the District Governor of Lions Clubs International, District 305 South Pakistan. Mr. Malik Khuda Buksh speaks about the prevailing scenario of petroleum business in Pakistan.

Economic Review: There are reports of adulteration in Diesel oil and Petrol. How far is it correct?

Malik Khuda Buksh: There is no adulteration as the government has brought the price of Kerosene oil at par with Diesel in last budget. It is interesting to note that the import of Kerosene oil was reduced to half since then. As far as Petrol is concerned, it is very difficult to check adulteration unless a complete test is carried out in a laboratory. Petrol Pumps do not have such facilities of checking and sell the same product which is supplied to them by the company.

ER: What is the dealers margin of profit nowadays?

MKB: The Dealer's margin of profit has declined drastically from 7.5 per cent in 1963 to 0.8 per cent at present, while there has been steep rise in operating cost of Petrol Pumps over the past many years. The present margin of profit of about 0.8 per cent is not even enough to cover evaporation losses of 1 per cent. In order to enable petroleum dealers to earn honestly, fixed commission arrangement be replaced by linking the dealer's margin of profit with price structure on percentage basis and be added to ex-Depot prices to be recovered from consumers. In view of prevailing operating cost of Petrol Station, it is suggested that 5 per cent dealer's margin to be fixed.

ER: Do you think that the present investment climate is conducive for petroleum business?

MKB: It does not appear so. Recently government has de-regulated its policy in connection with the installation of Petrol Pumps which can now be opened anywhere in the country without any prior approval from the sanctioning authority. As a result a large number of Petrol Pumps have been installed during a period of 2 years which has created an atmosphere of strong competition among the Petroleum Dealers. But the investment in Petroleum business could be attractive if government withdraws the ban on import of petroleum products.

ER: What is the existing procedure of import of deficit petroleum products?

MKB: Ministry of Petroleum Products & Natural Resources invites tender for the import of deficit petroleum products. The tenders are opened in presence of Suppliers or their agents and the lowest bidder is awarded the contract provided that his offer is within the framework of tender documents. The procedure adopted for bidding is so systematic that no one can raise any objection. Ministry also invites suggestions from the Suppliers to improve the tender document and procedures which are discussed in meetings with Suppliers and implemented if considered suitable. In the last meeting Director General of Ministry of Petroleum Products was kind enough to accept some of our suggestions which were aimed at improving the tender procedure for deficit products. These included submission of L/C and Bank guarantee format documents and also deleted the requirement of discharge port surveyor report from the suppliers. This is a good gesture of Ministry of Petroleum for which we are very grateful.

ER: What are your recommendations for streamlining the distribution of petroleum products?

MKB: Proper attention is needed to this vital sector which is causing appreciable losses to the national exchequer and is a constant source of discouragement for honest person in the trade. Following measure could help in bringing this trade out of crisis:

- The existing freight pool arrangement should be replaced with introduction of ex-depot prices of petroleum products.

- Depot to Depot transfers should be deleted from freight pool. These transfers should be left for the Marketing Companies to arrange themselves.

- The difference of LDO and HSD is an attractive element for the adulteration. It is, therefore, recommended that the prices for LDO, Kerosene and HSD be fixed at par.
COPYRIGHT 1993 Economic and Industrial Publications
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:interview with Malik Khuda Buksh
Publication:Economic Review
Article Type:Interview
Date:Feb 1, 1993
Previous Article:Oil and gas exploration in Pakistan.
Next Article:Future of lubricant industry is bright - Anwar Javed.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters