It is common for petrol and diesel prices, in the country, to fluctuate according to the changing rates in the international market. Currently, the rates are revised every 15 days, based on the international price and currency exchange rate. However, starting from May 1, 2017, petrol and diesel prices will be revised on a daily basis in accordance with international rates. This practice is already being followed in most advanced markets.
State-owned oil companies like Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) that own almost 90 per cent of the retail outlets in India are introducing a pilot from May 1, for daily revision of petrol and diesel prices in five cities of India.
This will be implemented first in Puducherry and Vizag in the south, Udaipur in the west, Jamshedpur in the east and Chandigarh in the north. After all the implications are studied, it is likely to be applied all over the country.
Both petrol and diesel prices were decreased at the beginning of this month after a long time. While petrol prices were cut by Rs 3.77 per litre, diesel prices were reduced by Rs 2.91 a litre. The implementation of dynamic pricing will help avoid sudden change in prices, which is common now. With dynamic pricing the prices will most likely increase or decrease by few paise per day.
Other private companies like Reliance Industries and Essar Oil are also expected to implement dynamic pricing in the future.