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New Delhi, May 1: In a bid to get along with volatility in global crude oil prices, the Indian Oil Corporation (IOC), the Bharat Petroleum Corporation Limited (BPCL) and the Hindustan Petroleum Corporation Limited (HPCL) are all set to launch a pilot project from today. Under the project, rates of fuel prices will be revised daily in five cities namely Chandigarh, Puducherry, Vizag in Andhra Pradesh, Udaipur in Rajasthan and Jamshedpur in Jharkhand. This means for these five cities, the prices will change every midnight starting from today.
An Indian Oil Corporation executive said prices would change at the back-end in 43 of its 109 outlets in these five cities. These oil operators own over 90% of petrol pumps in the country. The fuel prices will, however, be revised daily from today i.e. May 1 in sync with international market rates. If this pilot project is successful, it will be extended it to other parts of the country. An official from the IOC informed that there will be LED screens at the entrance of petrol pumps and posters at the entry and exit points. “They will display revised rates. Timings of the petrol pump (Retail outlet – RO), its code, extra facilities available at the outlet,” the official added.
Before this move, petrol prices were changed on the 1st and 16th of every month. On Sunday, petrol price was hiked by a marginal 1 paisa per litre and diesel by 44 paise a litre. This is the second increase in rates in April. The petrol rise in price has come into effect since Sunday midnight. Petrol and diesel prices were last hiked on April 16 with a Rs. 1.39 per litre increase in petrol and Rs. 1.04 a litre raise in diesel rates. With the change in prices that took place on Sunday, petrol per litre now costs Rs. 68.09 in Delhi, Rs. 70.68 in Kolkata, Rs. 77.46 in Mumbai and Rs. 71.17 in Chennai. Meanwhile, diesel costs Rs. 57.35 in Delhi, Rs. 59.61 in Kolkata, Rs. 63.12 in Mumbai and Rs. 60.71 in Chennai.
If fuel prices are changed daily, the big leaps in rates that need to be effected at the end of the fortnight will be removed and the consumer will be more aligned to market dynamics and market structure. IOC has also launched mobile app ‘fuel@ioc’ and a customer care number- 9224992249. People who wish to know the rates can also get it on their phone via message. The individual will have to just type RSP and the six digit code of a retail outlet near them.
It was reported that the rates will increase or decrease by few paise per litre on a daily basis where the rates will be hardly 5-10 paise more. Chandigarh Petroleum Association secretary, Amanpreet Singh said, “All petrol pump dealers have been informed that fuel rates of three state-owned fuel retailers of IOC, HPCL and BPCL will not vary.”
It has been reported that oil marketing companies have already installed new hardware and software at certain pumps for the daily price revision to be affected. Meanwhile, technological innovations such as price push will help oil marketing companies (OMCs) change price at midnight at over 100 outlets starting Monday, a Business Standard report said.
The base price would be in accordance to the global crude oil basket benchmarks. The oil marketing companies will add marketing margins, taxes, dealer commission, etc to the base price according to the report. Punjab Petroleum Dealers Association President Sandeep Sehgal told IANS that dealers in Chandigarh are worried that daily pricing could eat into their margins. Sehgal further added saying when it was fortnightly pricing, dealers used to take maximum and minimum stocks depending on the prices, which might not happen now.
It was mentioned in the report that prices will be conveyed to dealers a day earlier at 8.30 pm and information on prices will be provided to consumers too via SMSes and press releases. Instead of using fortnightly average, pump rates will reflect daily movement in international oil prices and rupee- US dollar fluctuations, PTI reported. IOC informed that customers may verify fuel prices by downloading the company app or visiting its website.
Petrol in Udaipur, Rajasthan costs Rs 70.57 a litre and diesel Rs 61.23, while in Jharkhand’s Jamshedpur, petrol costs Rs 69.33 a litre and diesel Rs 60.26, PTI quoted Indian Oil Corporation. In Chandigarh, one litre of petrol costs Rs 67.65 while diesel is priced at Rs 57.74. Meanwhile, in Vizag, petrol costs Rs 72.68 a litre and diesel Rs 62.81. In Puducherry, petrol is priced at Rs 66.02 per litre and diesel Rs 58.68 a litre.
Earlier this month, the Petroleum Ministry came down heavily on petrol pump owners as they decided to observe a holiday for petrol pumps on Sundays. The government has slammed their decision under the pretext of answering Prime Minister Narendra Modi’s call for oil conservation. The Petroleum Ministry said observing Sunday off would attract punitive actions from the government under Essential Commodities Act as petrol and petroleum products come under the purview of essential commodities.
Till March 2002, petrol and diesel prices were decided by the government but from April 1, 2002, a fortnightly system of pricing was adopted. A report by Gulfnews.com informed that the fuel prices have gone up as global oil prices recover due to an agreement reached between Opec (Organisation of the Petroleum Exporting Countries) and non-Opec members. The prices have increased in order to reduce their output by about 1.8 million barrels per day from January 1. The report further stated that oil producing are planning to extend the six-month deal beyond June as global oil inventories continue to be high.
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