PETROL ,DIESEL PRICES TO CHANGE EVERYDAY IN 5 CITIES FROM MAY

Coming May, petrol and diesel prices will change every day in sync with international rates, much like what happens in most advanced markets.

State-owned fuel retailers Indian Oil Corp. (IOC), Bharat Petroleum Corp Ltd. (BPCL) and Hindustan Petroleum Corp Ltd. (HPCL), which own over 95% of nearly 58,000 petrol pumps in the country, will launch a pilot for daily price revision in five select cities from May 1 and gradually extend it to all over the country.

The cities are Puducherry, Vizag, Udaipur, Jamshedpur and Chandigarh.

“Ultimately, we will be driving towards market linked rates on a daily basis at all pumps across the country,” IOC chairman B. Ashok told PTI.

State fuel retailers currently revise rates on 1st and 16th of every month based on average international price of the fuel in the preceding fortnight and currency exchange rate.

Instead of using the fortnightly average, pump rates will reflect daily movement in international oil prices and rupee-U.S. dollar fluctuations.

“It is technically possible to change rates daily, but we have to first do a pilot. Once pilot is done and its implications are studied, we will extend it to other parts of the country,” he said.

While Mr. Ashok said the pilot is to be “launched within one month,” industry sources said the pilot is planned to be launched on May 1.

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.

While petrol price was freed from government control in June 2010, diesel rates were deregulated in October 2014.

Technically, oil companies have the freedom to revise rates but often they have been guided by political considerations.

Rates differ by only a few paise between pumps of the three fuel retailers. Unbranded petrol at IOC pumps in Delhi costs ₹66.29 a litre, while the same at BPCL pumps in the city is priced at ₹66.37 a litre. HPCL pumps sell for ₹66.48.

Unbranded diesel at IOC pumps in Delhi costs ₹55.61, ₹55.66 at BPCL outlets and ₹55.69 at HPCL pumps.

With daily changes, which are unlikely to more than few paise a litre, the political pressures for not revising rates particularly when they are to be hiked will go, sources said.

Petrol price was last revised downward by ₹3.77 a litre on April 1, and diesel rates were cut by ₹2.91. This was the first revision in two-and-a half months as oil firms did not change prices during the Assembly elections in five States, including Uttar Pradesh and Punjab.

Mr. Ashok said prices of petrol and diesel in a particular market (city or town) wpuld be the same.

“By and large, in a particular market it should be same. Though, there might be marginal difference from pump to pump,” he said. Courtesy -PTI