Major oil marketing companies mull daily fuel price change

India's state-run oil marketing companies, which control over 90 per cent of the retail fuel market in the country, are mulling a plan that would allow daily changes in the price of automotive fuels, Economic Times reported on Friday.

State-owned and India's biggest oil marketing company Indian Oil Corp Ltd and its two smaller peers Bharat Petroleum and Hindustan Petroleum are considering ways to roll out the plan to review petrol and diesel prices daily, executives from the firms told the daily.

The state-run companies declined to immediately comment.

The daily price change — also called dynamic fuel pricing - essentially means the companies will not wait for a fortnight to adjust the price of petrol and diesel in tandem with crude price as they do now. Instead, they will change the price every day based on crude price movements.

This will help India move to an international standard of fuel pricing.

"This will cushion the companies from any loss they face due to currency and crude movements over a 15-day period and will make their margins more predictable," said Dhaval Joshi, an analyst with Emkay Global Financial Services.

The move would free private players — Essar Oil and Reliance Industries, which currently follow the price set by state-owned companies, to also shift to a dynamic model.