India’s state-run oil firms set up new system for daily fuel pricing changes

State-run oil marketing companies in India will be implementing a new system they have set up for the smooth rollout of the daily revision of transport fuel changes across the country, Indian Oil Corporation (IOC) said.

Petrol and diesel prices will be revised daily from June 16 onwards by the three OMCs in sync with global crude oil prices.Presently, the oil marketing companies review and revise retail fuel prices after every fortnight on the basis of global crude oil prices.

Daily revision of Retail Selling Prices (RSP) has already been implemented on a pilot basis in Udaipur, Jamshedpur, Visakhapatnam, Chandigarh and Puducherry from May 1. After the success of the experiment, IOC, Hindustan Petroleum Corporation Ltd, and Bharat Petroleum Corporation Ltd have now decided to implement it across the country.

In a statement, IOC said the move will ensure that the benefit of even the smallest change in international oil prices can be passed down the line to the dealers and the end users.

IOC said extensive training of dealers would be held to ensure that customers did not face any pricing misinformation or glitches.

All 26,000-plus IOC dealers will be given timely information on the effective prices at a pre-designated time — say 8 PM for the next day.

“At a large number of Indian Oil’s 10,000 automated fuel stations, daily price can be automatically updated centrally. Besides, technology also provides for scheduling the price change at midnight,” it said.

At the non-automated petrol pumps, dealers would get the updated price by way of four distinct means: customized SMSes, emails, mobile app and web portal for dealers.  Dealers will ensure price update at their fuel stations before start of sale, every day. Updated prices will be immediately exhibited at all petrol pumps for information of the public, the statement said.

For their convenience and assurance, customers would be able to fetch daily updated prices of petrol and diesel at all cities through IOC’s mobile app. Alternatively, customers may cross-check the prices applicable in their cities by sending an SMS.

Meanwhile, the Federation of All India Petroleum Traders (FAIPT) has, in a statement, said there will be “no purchase no sale” of petrol and diesel on June 16 to protest the decision.

“Dealers of five cities where it was launched have already burnt their fingers. They are crying at the inventory loss that they have already suffered due to the fluctuations in the daily changing prices on the inventory held by them,” FAIPT said.

“One tank lorry of 18 kiloliters lasts most of such small dealers 7 to 10 days. Any such decision shall wipe out his entire working capital if the prices were to go down frequently,” it said.

In some dealerships, a tank lorry takes two to three days to reach the petrol pump. In those cases, there is a strong possibility that by the time the tank lorry reaches the retail outlets, its price might have already went down causing the dealer losses, the association further explained.