Diesel, petrol prices to change daily from June 16; dealers raise concerns

Since May 1, the dynamic fuel pricing model has been applied on a pilot basis in 5 cities


State-run oil marketing companies (OMCs) have decided to roll out the daily revision of fuel prices nationally from the second fortnight of June.| ECONOMY NEWS

However, this has raised concerns about viability and inventory management among dealers. Currently, Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) review retail fuel prices every fortnight while taking global crude oil prices into account. “We are planning to have a national launch of the dynamic pricing system by the second half of this month. However, dates are yet to be finalised,” said a top official from an OMC. This development comes after reports that petrol and diesel prices will be revised on a daily basis from June 16.

It was on May 1 that the dynamic fuel price model was launched at five locations – Pondicherry, Chandigarh, Jamshedpur, Udaipur and Vishakhapatnam – in line with global practices. Interestingly, private fuel retailers like Essar Oil and Reliance Industries too followed the system in these cities.

“This will be a cause of concern as dealers will not be able to plan on how to manage their inventories. Moreover, not all the outlets in the country are automated. This may also affect our margins,” said A D Sathyanarayan, president, the Consortium of India Petroleum Dealers (CIPD). CIPD has a presence in states like Kerala, Tamil Nadu, Karnataka, and Maharashtra. On a monthly basis, each of these outlets consumes an average of 170 kilolitre of fuel. (READ FULL STORY)

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