Petrol & Diesel Prices To Be Revamped From May 1 On A Daily Basis

Update: Acting on accordance with the All India Petroleum Dealers’ Association’s announcement, the dynamic fuel pricing system is getting rolled out today. The fuel prices will be reset everyday at midnight in order to cope with the volatile nature of the global crude oil prices. By the recent update, petrol has been hiked by Rs 1 today and diesel by 44 paise.

Starting from the 1st of May, fuel prices will be revamped every day in sync with international rates, just like in the case of advanced markets. This will be first implemented in Puducherry and Vizag followed by Udaipur in Rajasthan, Jamshedpur in Jharkhand and Chandigarh.

The move will be taken by the state-owned fuel retailers, Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) which own over 95 per cent of nearly 58,000 petrol pumps in the country. The IOC Chairman B Ashok reportedly said, “Ultimately we will be driving towards market linked rates on a daily basis.”

Currently, the state retailers revise the fuel prices on the 1st and 16th of every month considering the average international price of the fuel in the preceding fortnight and currency exchange rate. However, from now on the pump rates will have a daily movement in effect to the international oil prices and Rupee-US Dollar fluctuations. Ashok has also reportedly added that to do a daily change of rates we have to first do a pilot which will be launched within a month. This daily change in prices will remove the big leaps in rates that need to be effected at the end of fortnight and the consumer will be more aligned to market dynamics.

The petrol price has been freed from the Government control in June 2010, diesel rates were deregulated in the year 2014. According to this, the oil companies have the freedom to revise rates but are often being guided by political considerations. The petrol rate has been last revised by a decrease of Rs.3.77 a litre in April and diesel was cut down by Rs.2.91. This was however the first revision made in two-and-a-half months as oil firms did not change the prices during the assembly elections.