Motor fuel prices set for daily revision from May 1

Motor fuel prices set for daily revision from May 1

Motor fuel prices set for daily revision from May 1
Much like gold and bullion, motor fuel in India is set for a daily price revision from May one. To start with, daily revision of oil prices will be implemented in the southern Vizag city, union territory of Puducherry and one city each in West, East and North India.

Industry sources said soon there will be pan India implementation of daily fuel price revision.

Besides Puducherry and Vizag, Udaipur in the West, Jamshedpur in the East and Chandigarh in the North of the country will see petrol and diesel price revision from May 1, according officials in the state-owned oil marketing companies.
The move is expected to shield the state-owned oil companies from the volatility in global crude prices which keep changing everyday. However, the public sector OMCs – Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation – usually revise retail prices petrol and diesel every fortnight.

Sometimes, they have to skip a revision for a long time. This often happens during elections. For example, oil prices have not been revised since January 15 although global crude prices have changed significantly since then.

Industry sources said that the practice of daily price revision of motor fuels is followed in many developed countries where it is called dynamic pricing.

India too follows the developed world practice of market determined motor fuel price mechanism but some kind of government influence at the retail level still exists in the country to protect consumers from sudden upward price fluctuations or unreasonably high market prices.

Petrol prices in India were deregulated in June 2010 and diesel followed in October 2014.

At present global crude oil prices are hovering around $50 per barrel but there were times when crude went up a record high of $140 per barrel in 2008.

Officials in the petroleum ministry declined to comment on whether there will be any government influence on prices in extreme circumstances.

Private sector companies like Relaince and Essar too are expected to follow suit.

According to Petroleum Minister Dharmendra Pradhan, everyday change in pricing of petroleum products was on the recommendation of experts and the government had nothing to do about it.