State owned IOC, BPCL and HPCL on Wednesday decided to have a uniform petrol price despite government giving them freedom to price the fuel and said they will revise prices once a month based on input cost.
The three retailers will once in a month "coordinate" on pricing of petrol based on international price trend of crude oil (the raw material used to make petrol) and gasoline, Indian Oil Corporation Director (Finance) S V Narasimhan said.
"All the three oil marketing companies will have uniform price," he said.
The decision to allow IOC, Bharat Petroleum and Hindustan Petroleum to function as 'informal' cartel was taken at a meeting called by Oil Secretary S Sundareshan. The meeting was called to decide on the modalities of how petrol will be priced after it was freed from the government control.
"Petrol price on June 25 were raised by Rs 3.50 per litre following price decontrol instead of Rs 3.73 a litre required to align them with cost," Narasimhan said.
Subsequently, international oil prices declined, wiping away most of losses. "We have reviewed the situation and as of now there is no need for revise petrol prices," he said.
On June 25, an Empowered Group of Ministers headed by Finance Minister Pranab Mukherjee had also decided to free diesel prices from government control but raised rates only by Rs 2 per litre instead of Rs 3.80 per litre required to align them with international cost.
The gap between retail selling price and international cost widened subsequently to Rs 3.14 per litre from Rs 1.80 a litre at the time of price hike. This has subsequently come down to Rs 1.70-1.80 per litre now.
"There is no decision or move to revise prices of diesel at this juncture," Sundareshan said.
Narasimhan said the oil companies do not feel the need for revising rates of petrol now and will review the situation possibly by the end of July.
From now only, pump rates will be revised once a month. The three companies will have a uniform rate for petrol in particular cities or locations, and it would change on the same dates.
"We will not announce dates of revision in advance to avoid hoarding of the fuel. We will revise prices on any day of the month," an official said.
Three PSUs have already held discussions with private retailers Reliance Industries, Essar Oil and Royal Dutch/Shell on modalities such as frequency and intervals at which prices would be revised.
Sundareshan said he hoped the private sector rates would not be very different from PSU fixed prices.