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  Business   Economy  08 Apr 2017  Daily change in petrol, diesel prices will benefit consumers

Daily change in petrol, diesel prices will benefit consumers

THE ASIAN AGE
Published : Apr 8, 2017, 1:20 pm IST
Updated : Apr 8, 2017, 2:29 pm IST

Under dynamic pricing model, OMCs will be able to reduce price risk arising out of fluctuations in crude.

Oil Marketing Companies presently change petrol and diesel prices every fortnight.
 Oil Marketing Companies presently change petrol and diesel prices every fortnight.

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.

Tags: omcs, oil marketing companies, dynamic pricing model, daily price change, petrol prices, diesel prices, global oil prices
Location: India, Maharashtra, Mumbai (Bombay)