With the success of a pilot project in five cities, dynamic retail fuel pricing on a daily basis will begin basis across all the 58,000 petrol pumps in the country on June 16. State oil companies will revise petrol and diesel prices daily in sync with international rates as happens in most advanced markets, starting the next Friday.
This is an extension of a pilot project the oil companies have been running in five cities — Udaipur in Rajasthan, Jamshedpur in Jharkhand, Puducherry, Chandigarh and Vizag in Andhra Pradesh —since May 1.
Sources said the rates of petrol and diesel would reflect daily movement in international oil prices and Rupee-US dollar fluctuations, and accordingly the prices will be fixed by the respective fuel outlet owners. “With daily changes, which are unlikely to more than few paise per litre, the political pressures for not revising rates, particularly when they are to be hiked, will go,” they added.
Rates will vary from city to city as well as from petrol pump to petrol pump with Indian Oil Corp (IOC), Hindustan Petroleum Corp ltd (HPCl) and Bharat Petroleum Corp ltd (BPCl) deciding to follow a marginal differential pricing.
“We are moving into a dynamic pricing. Correction in prices now happen after a gap of a fortnight but from now on it will be on daily basis to reflect the cost,” said IOC Chairman Sanjiv Singh said.
“After its successful implementation, public sector oil marketing companies (OMCs) have now decided to start daily revision in RSP of petrol and diesel in the entire country with effect from June 16, 2017,” the IOC statement said.
State fuel retailers currently revise rates on 1st and 16th of every month based on average international price of the fuel in the preceding fortnight and currency exchange rate. Instead of using fortnightly average, pump rates will reflect daily movement in international oil prices and rupee-US dollar fluctuations.
“Daily price revisions of petrol and diesel will make the retail prices more reflective of the current market conditions, minimising the volatility in the retail price,” the statements said.
This, it said, would lead to increased transparency in the system. “This will also enable smoother flow of products from refinery/depots to retail outlets (petrol pumps),” the statement said, adding that many developed countries are already revising the prices of petrol and diesel on a daily basis.