Under a recently announced pilot project, the price of petrol and diesel is being revised on a daily basis in five cities. The process started on Monday – India’s state-run oil marketing companies have planned a gradual move to international standards. Now, retail fuel prices will change every day, a move which aims to better shield them from volatility in global crude oil prices. Indian Oil, Bharat Petroleum and Hindustan Petroleum are the three fuel retailers who have rolled-out the project from May 1 in 5 cities – Puducherry, Vizag, Udaipur, Jamshedpur and Chandigarh. These cities are part of the initial experiment and the oil companies will implement the mechanism across the nation after ironing out any deficiencies that may arise.
Meanwhile, according to an Indian Express report, IOC, BPCL and HPCL had earlier issued the rates for May 1. The report said that the petrol pumps of BP showed that the rates of petrol in Chandigarh was Rs 67.65 per litre while that of diesel was Rs 57.74. Meanwhile, HPCL petrol pumps showed that the rate of petrol was Rs 67.67 per litre and that of diesel was Rs 57.76 for each litre. At the petrol pumps of IOC, petrol prices were Rs 67.65 and for diesel, it was Rs 57.74. The rates are displayed via LEDs and posters at every petrol pump.
Meanwhile, according to a release by the General Manager of BP, consumers could also verify the fuel rates by sending an SMS, by typing “RSP <SPACE > DEALER CODE” to the number 9223112222 or they can also download the SmartDrive app and locate the petrol pump to verify prices. Customers can also log on to the website of Bharat Petroleum. Users also have the option of calling the toll-free smart line number 1800 22 4344. Additionally, IOC has launched a mobile app ‘fuel@ioc’ and a customer care number- 9224992249 where the current rates can be found out.
The daily price change practice, commonly followed in many developed countries, is called dynamic fuel pricing. It is a practice in which the companies change the prices of petrol and diesel every day, based on crude price movements and don’t have to wait for a fortnightly review to adjust prices. According to the companies, the daily price change will remove the big leaps in rates that need to be effected at the end of the fortnight and consumers will be more aligned to market dynamics. While petrol price was freed from the control of the government in June 2010, diesel rates were deregulated in October 2014.
The introduction of daily price revision mechanism will likely propel Indian retail fuel market to international standards. This move will also allow private competitors, Essar Oil and Reliance Industries, which currently follow the price set by state-owned companies, to also shift to a dynamic model.
At present, the three state-run oil marketing firms review retail fuel prices periodically and usually revise them every fortnight to pass on the impact of global crude oil prices on their purchases to consumers.