Among the top stories that have made it to the bulletin lately is the petrol diesel price change news. As per a number of media reports, state-owned oil companies will be revising fuel prices on a daily basis from June 16, 2017 onwards. Applicable across India, the move aims at bringing the domestic oil sector at par with the most advanced international markets.
Petrol prices in India so far were revised twice a month – on the 16th and on the last day. The trend was based on the average prices of crude and related products in regional bulk markets during the preceding fortnight, along with the foreign exchange rate variations. But according to the new rule, government companies like Hindustan Petroleum Corp Ltd (HPCL), Indian Oil Corp (IOC), and Bharat Petroleum Corp Ltd (BPCL) will be revising fuel rates daily across all the 58,000 petrol pumps in India.
Commenting on the decision, IOC Chairman Sanjiv Singh said, “We are moving into dynamic pricing. Correction in prices used to happen after a gap of a fortnight, but from now on it will be on daily basis to reflect the cost.”
It is believed that daily fluctuation in retail selling price (RSP) of petrol and diesel will show a mirror to the current market conditions, thus eventually minimizing the retail price volatility, and increasing transparency.
According to the statement, “This (dynamic pricing) will also enable smoother flow of products from refinery/depots to retail outlets (petrol pumps).”
The statement also clearly mentioned, “Public Sector oil marketing companies are taking steps to establish an appropriate 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 centralized locations, mobile applications, etc.”
But the question that arises now is –will the national launch of the dynamic fuel pricing model be really helpful? Throwing light on the success of the month-long pilot drill ─ started on May 1, 2017 ─in five cities, namely Udaipur, Jamshedpur, Puducherry, Chandigarh and Vishakhapatnam is imperative here.
As of now, it is anticipated that private fuel retailers like Essar Oil and Reliance Industries will also follow the suite and revise fuel prices every day.
The last revision in fuel prices was done on June 1, 2017. The price of petrol was cut down by Rs 1.23 per liter, while diesel rates were reduced by 89 paisa.