Acting on All India Petroleum Dealers’ Association’s announcement, many state-run oil marketers are set to roll out a dynamic fuel pricing system from Monday according to the news agency IANS. The agency reports that as many as five cities will roll out the petrol and diesel prices daily from next month in order to cope with volatility in global crude oil prices.
An Indian Oil official told the agency that prices of oil will change every midnight at 109 of its outlets in the five cities – Puducherry and Vizag in southern India, Udaipur in the West, Jamshedpur in the East and Chandigarh in the North. Under this new strategy, the oil companies will change the price of transport fuels every day based on the crude price movements. This type of strategy is followed in many developed countries.
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The announcement was made by All India Petroleum Dealers’ Association President Ajay Bansal earlier this month. The decision was taken by Petroleum Minister Dharmendra Pradhan following a meeting with officials of the three oil marketers: Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum. “Mohali and Panchkula are inter-linked to Chandigarh, and pumps there will now lose market to nearby cities if prices are high,” Bansal was quoted as saying by the agency.
Punjab Petroleum Dealers Association President Sandeep Sehgal aslo told the agency that dealers in Chandigarh are worried that daily pricing could eat into their margins.”When it was fortnightly pricing, dealers used to take maximum and minimum stocks depending on the prices, which might not happen now,” he said. Global crude oil prices started rising since November-December on the talk of world’s major oil producers contemplating a cut in output. Oil has mostly traded above $50 a barrel since OPEC and 11 other countries started trimming supply in January.