Petrol prices may now change every week or 10 days but the hike is unlikely to be more that a rupee per litre. State-owned oil companies Indian Oil Corporation (IOC), Hindustan Petroleum and Bharat Petroleum are working on a plan to revise petrol prices once every week or in 10 days and eventually shift to a day-to-day revision system — as is the practice in most Western countries.
At present, these firms follow an ad hoc pricing model. Prices are either revised every fortnight or the decision is kept on hold for months, leading to a sharp hike when it comes.
"Since petrol prices have already been de-regulated, oil-marketing companies can now even consider day-to-day or any other period of pricing of petrol," say the minutes of the September 17 meeting between IOC officials and petroleum secretary GC Chaturvedi. HT has a copy of the minutes.
"...as a word of caution, OMCs may want to ensure that unit (per litre) increase at any instant... is less than rupee one keeping customer's interest in mind," say the minutes.
IOC's director finance PK Goyal told HT that the move was discussed but it was too early to talk about the day-to-day hike. "Most states have different VAT/tax rates and so daily revisions become difficult to implement."
With frequent but small revisions, the consumers may find the hikes easy to accept.
In most European countries and the US, prices change daily. The model keeps hikes in check.