Expressing his concern over a daily revision in retail selling prices of petrol and diesel across the country from June 16, President of the Delhi Petroleum Dealers Association Nischal Singhaniya on Friday stated that he welcomed the move, but the rates should change automatically and not in any manual intervention. “The automation has been placed in all the 400 petrol pumps in Delhi. It is not as robust as it should be. The rates don’t change automatically at all the machines because at midnight we receive SMS from the oil company and check the rates manually. There have been delays in the past when we had the fortnight revision so if it happens daily there might be a situation when a customer has to wait every day for more than an hour for the rates to change. We welcome the move and all that we ask for is – the rates should change automatically and there should not be any manual intervention,” Singhaniya told ANI.
Singhaniya further stated that this should be done on a daily basis as it would cause hassle to the customers. “Although it is an international norm and if you go to see in other foreign countries the rates are changed every day. In India, there is a control regime, although it’s an open market, the rates are controlled by the oil companies and we see no point that this should be done on a daily basis as it can be continued on a fortnight basis. We only request the oil companies to take care of the capital erosion, which is needed to be taken under control. We also want that customers should not be in any inconvenience because of all this,” Singhaniya said.
State-run oil marketing companies (OMCs) yesterday decided to roll out the daily revision of fuel prices nationally from June 16. This move entails logistical problems for them and could lead to delays around midnight when the prices will be changed. Government officials said the decision was taken after the success of a pilot project since May in five cities where prices changed daily at fuel stations fed by the three state-run oil marketing companies — Indian Oil Corporation (IOC), Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL).
Private retailers such as Reliance Industries (RIL) and Essar are also expected to adopt the new pricing mechanism. Petrol prices were freed from government control in June 2010 and diesel in October 2014, allowing oil marketing companies to fix retail prices in tune with global crude prices. A majority of the nearly 58,000 petrol pumps in India are owned and operated by dealers. And 60-70 percent of these pumps are on the highways, said the association. It also sought an automated system to reflect price changes from the state-run oil marketing companies without the intervention of dealers.
Technically, oil companies have the freedom to revise rates, but very often they are influenced by political considerations. With daily changes, which are unlikely to be more than a few paise per litre, the political pressures for not allowing significant hikes in oil prices will go. State fuel retailers currently revise rates on the 1st and 16th of every month, based on average international crude price in the preceding fortnight and currency exchange rate. The last revision in fuel prices was on May 31, when petrol was hiked by Rs 1.23 and diesel by 89 paise. The current price of petrol in Delhi is Rs 66.91 and diesel Rs 55.79.