New Delhi: The state-owned oil marketing companies will revise petrol and diesel prices every day throughout the country from June 16 depending upon international prices and the valuation of the rupee. Many developed nations too revise petrol and diesel prices on a daily basis.
The Indian Oil Corporation, Hindustan Petroleum and Bharat Petroleum implemented the daily revision of fuel prices on a pilot basis in Udaipur, Jamshedpur, Puducherry, Chandigarh and Visakhapatnam from May 1. “After its successful implementation, the OMCs have now decided to start daily revision in retail selling prices of petrol and diesel in the entire country with effect from June 16,” an Indian Oil statement said on Thursday.
These prices are now revised on the 1st and 16th of every month based on the average international price of the fuel in the preceding fortnight and currency exchange rate. With daily changes, unlikely to be more than a few paise per litre, the political pressure to not revise the rates, particularly during Assembly elections, will go.
The oil companies said daily price revisions of petrol and diesel will make retail prices more reflective of current market conditions, minimising volatility in the prices of petrol and diesel. It will lead to increased transparency, and enable the smoother flow of products from refineries and depots to retail outlets.
The rates will vary from city to city as well as from petrol pump to petrol pump, with IOC, HPCL and 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 cost,” IOC chairman Sanjiv Singh said. The public sector OMCs are taking steps to establish a mechanism to convey the prices to consumers every day, including publishing the prices in newspapers daily, prominent display of prices at retail outlets, sending of price-related data/SMS from centralised locations and mobile apps, among others.
The move may encourage private firms like Reliance Industries to aggressively expand their petrol pump network across the country and increase competition for state-owned firms, that till now had a monopoly. The private firms have been reluctant to expand aggressively so far as the government was selling petrol and diesel at subsided prices through the oil PSUs.
But the decontrol of petrol prices in June 2010 and diesel prices in October 2014 gave an opening to the private firms.