The rationale behind the move is to introduce international standards in the Indian fuel retail market.
Starting today, petrol and fuel prices will undergo daily revisions by state-run oil marketing companies (OMC). The move by state-run fuel retailers like Indian Oil Corporation, Hindustan Petroleum and Bharat Petroleum will mark a departure from the earlier practice of fortnightly revisions of rates.
In the past, the revisions happened on the 1st and 16th of every month, based on average international prices in the preceding fortnight and the currency exchange rate. But now, the fuel rates will change every day depending on any movement in international oil rates. This is what is called ‘dynamic fuel pricing.’
The move was rolled out on a national level from 6 a.m. Friday, after a 40-day pilot scheme based on the same model in five cities, including Chandigarh, Jamshedpur, Puducherry, Udaipur and Visakhapatnam on May 1, 2017.
The rationale behind the move is to introduce international standards in the Indian fuel retail market. A report on moneycontrol.com says oil companies and customers both will benefit from the new scheme. It said:
“By changing prices daily, the oil companies will be able to reduce the price risk arising out of fluctuations in crude as they can now realign the prices the moment the fuel leaves the refinery gates.”
The change in policy received backlash originally when the original time for revision of rates was set at midnight. After being threatened by a strike, Oil Minister Dharmendra Pradhan said that the price change will happen at 6 am.
In order to help customers keep track of the price change, the retailers will immediately make it available to customers. As soon as the prices are updated, the automated petrol bunks will update it on their LED hoardings. The prices will be effective immediately.
If you’re wondering how to keep track of the daily revisions, follow our guide below:
1. Via mobile app: The price change will also be available on the retailers’ mobile apps.
Customers can download Indian Oils app Fuel@IOC to keep a track of the updated daily petrol prices in all cities
2. Via Webpage: Customers can also avail information on the change from the retailers’ websites under the “Pump Locator” head. They can also check the daily revision using RO Locator.
3. Via SMS: The prices will be available via SMS as well. Customers can send a message — RSP< SPACE >DEALER CODE TO 9224992249. The dealer code of each petrol pump is displayed at the fuel station.
How will this affect you?
Consumers are less likely to feel the pinch of a big jump that fortnightly changes bring as against small daily price changes. It is also expected to help check hoarding and consumers may get the benefits of an international cut sooner. So, fuel becoming cheaper will be an added bonus!
But this will add one more factor to the change in price of essential commodities such as food items, cereals, fruits and vegetables. The prices of essentials may fluctuate daily, according to the Economic Times.
Meanwhile, many pumps in the remoter corners on the country are not automated and lack internet connectivity, which may affect daily revisions. The implementation may be a problem in small towns where manpower is low.