Private fuel retailers to revise prices daily

Taking a cue from state-run oil marketing companies (OMCs), private sector fuel retailers Reliance Industries, Essar Oil and Shell India are likely to revise motor fuel prices on a daily basis from Friday.

“Our outlets are already automated and can go live with dynamic pricing any day. As soon as other players shift to a daily pricing regime, we will also,” said a senior official from a private sector major, on condition of anonymity.

As of April 1, by official data, India had 59,595 fuel retail outlets. Of these, close to 54,000 were owned by state-run Indian Oil Corporation (IOC), Hindustan Petroleum Corporation and Bharat Petroleum Corporation. The others are owned by private players. “It is a good decision by the government. There might be some teething issues in the beginning but will benefit all stakeholders in the long run,” said Lalit Gupta , managing director, Essar Oil.

Dealer associations, however, have called for 'no purchase' from Friday. Ajay Bansal, president, All India Petroleum Dealers' Association, says the decision on daily revision of prices by OMCS was made without consulting dealers. The dealers also want a n increase in their sales commisison, now two to three per cent. OMCs are expected to decide on this by June 30. “Through daily pricing, we will have a closer alignment with international prices and better transparency in the system. More, it will reduce the volatility in retail selling prices and help inventory management.

From a customer point of view, India will be following the global practice,” a petroleum ministry official told Business Standard.

Before taking the decision on daily revision, the state OMCs did a 40-day run in five cities — Chandigarh, Jamshedpur, Puducherry, Udaipur and Visakhapatnam. They say extensive training of dealers will be held to ensure customers face no pricing misinformation or glitches.