Daily change in petrol, diesel prices soon; 5-city trial to begin from May

After the initial trial, the impact of the new system will be judged before a national launch

Giving a major relief for oil marketing companies (OMCs) like Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL), India may soon enter into a daily revision of fuel pricing. This will be launched in five cities, including Puducherry, Vizag, Udaipur, Jamshedpur and Chandigarh, on an experimental basis, ahead of the national launch.

This was finalised at a meeting held in the petroleum ministry chaired by Minister of State for Petroleum and Natural Gas Dharmendra Pradhan on April 10, in which all the top directors of state-run OMCs, including IOC Chairman B Ashok, were present. According to industry sources, a formal announcement on the daily dynamic pricing system will be done by Pradhan after the Bharatiya Janata Party's national executive meeting in Bhubaneshwar on April 15 and 16.   

At present, OMCs revise petrol and diesel prices on a fortnightly basis, depending on global pricing trends. However, it was widely criticised that political parties force companies to hold price hikes during election time, even though petrol and diesel prices are currently decontrolled. Petrol prices were decontrolled in June 2010, while diesel prices were de-regulated in October 2014.     

"This will be applicable on 200 fuel stations across five cities initially. Later, it will be extended after scrutinising the positives and negatives of a daily pricing regime," said an industry source who did not want to be named. Out of the total 56,190 fuel retail outlets that India has, public sector majors like IOC, BPCL and HPCL have a combined network of 52,604 outlets.

In 2015-16, the overall fuel demand zoomed to 183.5 million tonnes from 165.5 million tonnes in the previous financial year. While diesel consumption increased 7.5 per cent to 74.6 million tonnes, petrol use rose 14.5 per cent to 21.8 million tonnes.

Petrol and diesel prices were last revised on March 31. The price of petrol was cut by Rs 3.77 per litre and that of diesel by Rs 2.91 a litre, in March, a change in fuel pricing after two-and-a-half months. Petrol, currently, costs Rs 71.14 a litre in Delhi and Diesel is priced at Rs 59.02 per litre.