Petrol, diesel rates to be revised daily from June 16

The OMCs plan to use their field officers to convey the daily change in prices especially in areas where connectivity is an issue.

By: ENS Economic Bureau | New Delhi | Published:June 9, 2017 2:58 am
petrol price Representational image

Starting June 16, retail selling prices of petrol and diesel are set be revised every day by the three state-run oil marketing companies (OMCs) across the country, the OMCs said on Thursday. Indian Oil Corp, Hindustan Petroleum Corp and Bharat Petroleum Corp had started a pilot project in five cities —Udaipur, Jamshedpur, Puducherry, Chandigarh and Visakhapatnam — starting May 1, 2017 wherein prices of these fuels changed daily according to the international crude prices, the three firms said in separate but identical statements.  Daily change in prices will minimise volatility and will not lead to sudden increase or decrease in prices. Till now, retail fuel prices are revised fortnightly.

“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,” IOC chairman Sanjiv Singh said. The OMCs expect the new system will enable a smooth flow of products from refineries or depots to retail outlets. Many developed countries already revise prices of petrol and diesel on a daily basis. The release added the companies are taking steps to establish an appropriate mechanism for conveying prices to consumers every day, which may include daily publishing of the prices in newspapers, prominent displays of prices at retail outlets, sending price-related text messages from centralised locations and developing mobile apps.

The OMCs plan to use their field officers to convey the daily change in prices especially in areas where connectivity is an issue. According to experts, mobiles will play an important role in implementing the system. “The positive side is that retail price deregulation is here to stay. For consumers, they will ignore the minor change in prices unlike fortnightly changes wherein prices fluctuate, at times, quite significantly,” said Debasish Mishra, partner at consultancy firm Deloitte India. 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.

“This will also enable smoother flow of products from refinery/depots to retail outlets (petrol pumps),” the statement said. “Many developed countries are already revising the prices of petrol and diesel on a daily basis.” While petrol price was freed from government control in June 2010, diesel rates were deregulated in October 2014. Technically, oil companies have freedom to revise rates but often they have been guided by political considerations. Rates differ by only a few paise between pumps of the three state fuel retailers. Unbranded petrol at IOC pumps in Delhi costs Rs 66.91 per litre, while the same at BPCL pumps in the city is priced at Rs 66.99 a litre. HPCL pumps sell for Rs 67.12 per litre.

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