Automated system for daily revision of fuel prices rings in, petrol pump owners miffed
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New Delhi/Mumbai: Petrol pump owners on Sunday said they will stop purchasing fuel from 16 June, when a plan for daily revision of diesel and petrol prices in sync with crude oil prices is set to take effect. The dealers said retail outlets need to be automated first before such a change can be made.
After a five-city pilot project, three state-run oil marketing companies (OMCs)—Indian Oil Corp. (IOC) Ltd, Bharat Petroleum Corp. Ltd (BPCL) and Hindustan Petroleum Corp. Ltd (HPCL)—on 8 June decided to implement the daily revision nationwide starting 16 June.
“This is not a strike. We are just terming it no-purchase till our concerns are addressed. We do not think we are ready to roll out daily fuel pricing across till all the retail outlets are automated. This could lead to transparency issues,” Ajay Bansal, president of All India Petroleum Dealers’ Association told Mint.
Bansal’s association represents dealers who sell 86% of auto fuel sold in India; private companies such as Reliance Industries Ltd and Essar Oil Ltd sell the rest.
Oil companies have called upon dealers for a meeting on Tuesday to discuss their concerns over daily price revision, Bansal said.
The association will seek to postpone the plan’s implementation. Meanwhile, dealers are keeping open the option of protesting, including by not purchasing fuel, if the meeting does not address their concerns.
According to Bansal, OMCs decided to implement the daily price change all of a sudden. “It has to be implemented by dealers and it requires automation in price administration. It cannot be done manually,” he said.
He said dealers will decide their next step depending on the outcome of the meeting.
Meanwhile, the OMCs took out advertisements in Sunday’s newspapers announcing the shift to daily prices and how customers can check the latest prices.
The decision to move from fortnightly revision to daily revision follows the successful implementation of pilot projects in Udaipur, Jamshedpur, Puducherry, Chandigarh and Visakhapatnam from 1 May, a statement from oil companies said on 8 June.
Daily price revision is an international practice. Oil companies said it will make retail prices more reflective of the current market conditions and will increase transparency in the system.
However, whenever there is a sudden spike in global prices on account of geopolitical reasons, it will instantly get reflected in local prices too. In fortnightly prices, short-lived sentiment-driven price spikes get ironed out.
A senior official from an oil marketing company, on condition of anonymity said: “The fears of petroleum dealers are unfounded. When we implemented the daily pricing in five cities on a pilot basis, not all retail outlets were automated. But we still ran smooth operations. So now, when daily fuel pricing is extended across the country, we do not anticipate any issues. We will explain it to the dealers in our meeting on Tuesday.”
There are 56,000 retail outlets of which only around 20,000 are automated so far. The ministry has asked the OMCs to automate all outlets by March.