Indian Oil Corp (IOC),Hindustan Petroleum Corp. Ltd (HPCL) and Bharat Petroleum Corp. Ltd (BPCL) have launched a pilot project for daily price revision of petrol and diesel in five select cities from May 1. The prices will be in sync with international rates, much like it happens in most advanced markets. Udaipur is among the five cities of the country including Visakhapatnam, Puducherry, Chandigarh and Jamshedpur where fuel prices would change daily from Monday.
- State fuel retailers currently revise rates on the 1st and 16th of every month based on average international price of fuel in the preceding fortnight and currency exchange rate. Hence in a month, rates are revised only twice.
- Instead of using fortnightly average, pump rates will now reflect daily movement in international oil prices and rupee-US dollar fluctuations.
- Apart from the display boards, the customers would also get to know about the daily prices through SMS. Mobile numbers would be displayed at the fuel stations and the people can send SMS to those numbers to know fuel price for the day.
- The retailers would be informed of the revised price every night through automation machines which would reflect on the display boards at the fuel stations
Benefits of new system:
- Daily price change will remove the big changes in rates that need to be effected at the end of the fortnight and consumer will be more aligned to market dynamics.
- The dealers are not happy with the new system as they fear it would eat into their margins. When it was fortnightly pricing, dealers used to take maximum and minimum stocks depending on the prices which will not happen now.
- Internet connectivity is seen as another hindrance in the smooth implementation of the project.