Who ultimately bears the cost of higher petroleum dealer margins?

The federal government has increased the commission paid to petroleum dealers by Rs1.34 per litre after accepting one of their longstanding demands. At first glance, the increase in dealers’ margin appears modest. However, when applied to the billions of litres of petrol and diesel consumed every year, its effect extends well beyond petrol pumps. For consumers already grappling with the highest fuel prices since March 2026 due to the war in the Middle East, the decision raises an important question: who ultimately bears the cost of higher dealer margins? The increase was announced on the public holiday of August 14, soon after petroleum dealers threatened a countrywide strike. The timing…