This is a bad news for all Motor Vehicles users as the Petrol and Diesel prices are said to be changing every day from May 1, 2017. According to the reports, the prices change in sync with the International rates, much like what happens in most advanced markets. Petrol price was last revised downward by Rs 3.77 a litre on April 1, and diesel rates were cut by Rs 2.91. This was the first revision in two-and-half-months as oil firms did not change prices during assembly elections in five states, including Uttar Pradesh and Punjab.
State-owned fuel retailers Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL), which are said to own over 95% of nearly 58,000 petrol pumps in the country, will launch a pilot for daily price revision in five selected cities from May 1 and gradually extend it to all over the country.
Dharmendra Pradhan, Petroleum Minister said that “Oil companies will implement it on the pilot project in 5 cities. After this, they’ll decide what to do with rest of the country. A pilot for daily revision of petrol and diesel price will be first implemented in Puducherry, Vizag in Andhra Pradesh, Udaipur in Rajasthan, Jamshedpur in Jharkhand and Chandigarh.”
Currently, the state fuel retailers revise the fuel rates on 1st and 16th of every month based on the average International price of the fuel in the preceding fortnight and currency exchange rate. Instead of using fortnightly average, pump rates will reflect daily movement in international oil prices and rupee-US dollar fluctuations.
“Ultimately, we will be driving towards market linked rates on a daily basis at all pumps across the country. It is technically possible to change rates daily but we have to first do a pilot. Once the pilot is done and its implications studied, we will extend it to other parts of the country,” IOC chairman B Ashok said.
He added that the pilot is to be launched within one month and did not give a specific date, industry sources said the pilot is planned to be launched on May 1, 2017. It is said that the daily price change will remove the big leaps in rates that need to be effected at the end of the fortnight and consumer will be more aligned to market dynamics.
In June 2010, the Petrol price was freed from Government control whereas Diesel rates were deregulated in October 2014. So, technically the Oil companies have freedom to revise rates but they are often been guided by political considerations. Rates differ by only a few paise between pumps of the three state fuel retailers.
Unbranded petrol at IOC pumps in Delhi costs Rs 66.29 per litre, while the same at BPCL pumps in the city is priced at Rs 66.37 a litre. HPCL pumps sell for Rs 66.48 per litre. Unbranded diesel at IOC pumps in Delhi costs Rs 55.61, Rs 55.66 at BPCL outlets and Rs 55.69 a litre at HPCL pumps. With daily changes, which are unlikely to more than few paise per litre, the political pressures for not revising rates particularly when they are to be hiked will go, sources said.