IOC awaits Centre nod on dynamic fuel pricing across India

The ongoing dynamic fuel pricing pilot project in five cities by state-run oil marketers, whereby transport fuel prices are changed daily, would only be extended elsewhere in India on receiving the government's green signal, a senior oil executive said on Thursday.

"We started dynamic pricing in five cities in May. The pilot project is on-going," India Oil Corp (IOC) Chairman B. Ashok said at a press conference here called to announce the corporate results for the fourth quarter and the full fiscal 2016-17.

"The government has been collecting the feedback and will take a decision on the future of this project," he said.

Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum rolled out dynamic fuel pricing so as to better cope with volatility in global crude oil prices from May 1 in five cities -- Puducherry and Vizag in southern India, Udaipur in the west, Jamshedpur in the east and Chandigarh in the north.

Elsewhere across India, petrol and diesel prices are currently revised on a fortnightly basis.

Under this project, the companies change the price of transport fuels every day based on crude price movements. Dynamic pricing is followed in many developed countries.

The Indian basket, comprising 73 per cent sour-grade Dubai and Oman crudes, and the balance in sweet-grade Brent, closed trade on Wednesday at $53.28 for a barrel of 159 litres, which was higher than the previous day's close at $52.64.

Meanwhile, Organisation of the Petroleum Exporting Countries (OPEC) and non-OPEC producers meeting in Vienna on Thursday are expected to extend output cuts for another 9 months in view of the recent rise in US shale inventories.

Last week, Saudi Arabia and Russia agreed on the need to prolong the current agreement on cuts, which expires in June, until March 2018.

In early December, oil producers outside OPEC, led by Russia, agreed to reduce output by 558,000 barrels per day (bpd). This came in the wake of the OPEC's November 30 decision to cut output by 1.2 million bpd for six months effective from January 1.

--IANS

bc/vt