India’s state-run oil marketing companies will revise petrol price on a daily basis all across the country beginning June 16, ET Now reported on Wednesday citing unidentified sources from the Ministry of Petroleum and Natural Gas. The reported roll out of daily petrol price revision mechanism all across India comes close on the heels of a pilot project to review petrol and diesel prices on a daily basis in five cities from May 1. There is no immediate information available on daily revision of diesel prices across all India.
The daily price change practice, commonly followed in many developed countries, is called dynamic fuel pricing. It is a practice in which the companies change the prices of petrol and diesel every day, based on crude price movements and don’t have to wait for a fortnightly review to adjust the prices.
The proposed move will allow the oil companies to align their retail prices more closely with the crude prices and will help them in tapering their losses, as currently, the oil companies are vulnerable to fluctuations in currency and crude oil prices over the 14-day cycle of retail price adjustment. This shift in pricing practice will also help in predicting their margins more accurately.