Petrol And Diesel Prices Will Change Every Day From Mid-June

It was about a couple of months ago that we first told you about the Government's plan to revise fuel prices in India on daily basis. State-owned fuel retailers Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) initiated a pilot in five cities - Puducherry, Vizag, Udaipur, Jamshedpur, and Chandigarh - for daily price revision from May 1. Now, after the successful pilot run, they have announced that from 16th of June 2017, petrol and diesel prices will be revised on a daily basis, pan India. This, the companies say, will happen in sync with international rates similar to what happens in most advanced markets.

Evidently, this daily revision of fuel prices will vary from city to city and even from petrol pump to petrol pump. In fact, Indian Oil Corp, HPCL and BPCL will be deciding to follow a marginal differential pricing. While all three firms have issued their respective statement on this situation, the basic crux of the matter remains the same - "After its successful implementation, public sector oil marketing companies (OMCs) have now decided to start daily revision in RSP of petrol and diesel in the entire country with effect from June 16, 2017."

Fuel prices will change daily as per oil prices in international market

The companies claim that with daily price revisions, they will be able to remove the big leaps in rates that currently happen at the end of every fortnight and consumer will be more aligned to market dynamics. Sanjiv Singh, the Chairman of Indian Oil Corporation (IOC) has said, "We are moving into a dynamic pricing. Correction in prices now happens after a gap of a fortnight but from now on it will be on daily basis to reflect the cost." Petrol and diesel prices will change daily by a few paisa per litre depending on oil prices in international market and variation in foreign exchange rates.

As of now, the State-run fuel retailers revise rates 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. The companies claim that this will make the retail prices more reflective of the current market conditions, minimising the volatility in the retail price and lead to increased transparency in the system.

OMCs plan to launch mobile apps to update consumers with the updated prices every day

Currently, there are 58,000 petrol pumps in the country and to make things easier for the general public, public sector oil marketing companies (OMCs) has announced that they will take appropriate measure update consumers with the updated prices every day. This includes - daily publishing of the prices in the newspaper on a daily basis, prominent displays of prices at the retail outlets, sending of price-related data/SMS from the centralised locations, mobile apps and such other measures.

Interestingly, control over both petrol and diesel prices were freed from the government control in in 2010 and 2014 respectively. These mean oil companies are already free to update prices whenever they want. Also, rates between the pumps of these three major companies only differ by only a few paise. For example - unbranded petrol at IOC pumps in Delhi costs Rs. 66.91 per litre, while the same at BPCL pumps is priced at Rs. 66.99 a litre followed by Rs. 67.12 per litre in HPCL pumps. Unbranded diesel at IOC pumps in Delhi costs Rs. 55.94, Rs. 55.99 at BPCL outlets and Rs. 60.94 a litre at HPCL pumps. Petrol price was last revised downward by Rs. 1.23 a litre on the 1st of June 2017, and diesel rates were cut by Rs. 89 paise.