IOC awaiting govt nod on daily fuel price revision across India
With measly changes in fuel prices daily, the political pressures for resisting prices hikes will come down.business Updated: May 25, 2017 19:00 IST
After starting a pilot project on daily fuel price revision in five cities, state-owned fuel retailers such as Indian Oil, are now awaiting government decision on whether to roll out the scheme across India.
“We started dynamic pricing in 5 cities in March. The pilot project is on-going,” IOC chairman B Ashok said at a press conference.
Asked if the pilot project has been a success and if it will be rolled out across the country, Ashok said: “The government has been collecting the feedback and will take a decision on the future of this project.”
A daily pricing scheme protects the consumer from the volatility of oil prices in global markets.
With measly changes in fuel prices daily, the political pressures for resisting prices hikes will come down.
For the fuel retailers--Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL), which own more than 95% of the nearly 58,000 petrol pumps in the country--a dynamic pricing helps secure profit margins.
The oil retailers have been running a pilot project in five cities--Puducherry, Visakhapatnam in Andhra Pradesh, Udaipur in Rajasthan, Jamshedpur in Jharkhand and Chandigarh--to link the domestic prices with international rates, as it happens in most developed countries.
The government wants to test the waters before extending it to other parts of the country.
At present, the fuel retailers revise petrol and diesel prices on the 1st and 16th of every month based on average international price of fuel in the preceding fortnight and currency exchange rate.
While petrol price was freed from the control of the government in June 2010, diesel rates were deregulated in October 2014.