Daily change in fuel price to reflect market: Oil companies

New Delhi: State-owned oil marketing companies (OMCs) will revise petrol and diesel prices everyday through out the country from June 16 depending upon their international prices and rupee’s valuation.

Many developed countries are already revising the prices of petrol and diesel on a daily basis. Indian Oil Corporation (IOC), Hindustan Petroleum (HP) and Bharat Petroleum (BP), had implemented daily revision of prices of petrol and diesel on pilot basis in Udaipur, Jamshedpur, Puducherry, Chandigarh and Vishakhapatnam from May 1.

“After its successful implementation, Public Sector 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, 2017,” said Indian Oil on Thursday.

Currently these firms revise fuel prices on 1st and 16th of every month based on average international price of the fuel in the preceding fortnight and currency exchange rate. With daily changes, which are unlikely to more than few paise per litre, the political pressures for not revising rates particularly during assembly elections will go.

Oil companies said that daily price revisions of petrol and diesel will make the retail prices more reflective of the current market conditions, minimising the volatility in the prices of petrol and diesel. It will lead to increased transparency in the system.

This will also enable smoother flow of products from refinery/depots to retail outlets. Public sector OMCs are taking steps to establish a mechanism for conveying the prices to consumers every day, including daily publishing of the prices in newspaper on a daily basis, prominent displays of prices at the retail outlets, sending of price-related data/SMS from the centralised locations and mobile apps among others.

The move may encourage private firms like Reliance Industries to aggressively expand their petrol pump network in the country and increase competition for the state owned firms which till now have enjoyed a monopoly.

Private firms have been shy of expanding aggressive as for a long time government was selling petrol and diesel on subsided prices through public sector OMCs. However, petrol price were decontrolled in June 2010 and diesel on October 2014 giving an opening to private firms.