Mumbai: State run Oil Marketing Companies, Indian Oil Corporation, Bharat Petroleum Corporation, Hindustan Petroleum Corporation and Oil India considering plans to bring in 'dynamic pricing' model for petrol and diesel.

Under dynamic model of pricing, once in place, prices of petrol and diesel will change everyday on the lines of global oil prices that change on a daily basis. However, a report on moneycontrol.com says oil companies and customers both will benefit from the new scheme.

"By changing prices on a daily basis the oil companies will be able to reduce the price risk arising out of fluctuations in crude as they can now realign the prices the moment the fuel leaves the refinery gates," the report said.

Presently, BPCL, HPCL, Indian Oil and Oil India state-owned oil marketing companies together control a larger chunk i.e. 95 per cent of the oil market in India. At present, these OMCs change petrol and diesel prices every fortnight.

The report also says that hedging which usually occurs between 5-7 per cent will now be triggered in a month’s time, and not two as it was an earlier practice. The government has already indicated that it will merge all state-owned oil marketing companies and form a single unified global energy behemoth.

Once all these entities unite and become one company, evaluating prices of petrol and diesel based on dynamic pricing model would be much easier.