The simmering differences between the oil marketing companies (OMCs) and retail fuel outlet dealers were doused on Wednesday through the intervention of petroleum minister Dharmendra Pradhan and the proposed strike by the petrol pump owners was called off. After a meeting with dealers, Pradhan told the media that the dealer associations have assured cooperation in the roll-out of the daily price revision of diesel and petrol prices starting June 16 pan-India as planned earlier. Earlier, despite OMCs maintaining that daily revision of petrol and diesel retail prices will lead to better management of inventories, dealers had threatened to go on a indefinite strike starting June 16 if the date of roll-out was not postponed as the automation systems, they claim, were not ready.
Pradhan said OMCs will put in all efforts to make all fuel outlets automated at the earliest. Last week, OMCs said fuel prices will be revised on a daily basis starting June 16 reflecting changes in international prices. The announcement followed a pilot in five cities — Udaipur, Jamshedpur, Puducherry, Chandigarh and Visakhapatnam —which was started on May 1, 2017.
Private oil retailers, meanwhile, were in favour of the decision as they already have been offering differentiated prices and have fully automated retail outlets. Dealers associated with OMCs had contended they would be making losses after the prices change between the time fuel is purchased and it is actually delivered at the outlets, and had demanded that OMCs should absorb the shock of intermittent change in prices.
Dealers also claimed that given not all retail outlets are fully automated, there will be downtime of around an hour every midnight as every nozzle point will be required to be reset manually, and stock of fuel sold and left in the tank will have to ascertained before restarting sales. However, there would have been no such issue at the functional automated retail outlets as the price can be reset remotely by an OMC and inventory sold can be calculated. It, however, has now been agreed that price changes will be reflected every morning at 6am, a time when the rush at retail outlets is relatively low.
Rating agency Icra, in a recent report, had noted that the daily revision was also expected to safeguard consumers as they will not feel the pinch of a sudden huge change in prices as prevalent now under fortnightly price review and will also reduce the chances of the issue being politicised.