State companies to revise petrol, diesel prices daily from June 16

NEW DELHI: State-run fuel retailers will revise petrol and diesel prices daily from June 16 throughout the country to counter undercutting by private retailers and to bring India at par with the US oil market.
The move follows successful implementation of a month-long pilot run in Udaipur, Jamshedpur, Puducherry, Chandigarh and Vishakhapatnam from May 1.Public sector retailers have so far been revising prices on the 16th and last day of each month -- except in these cities -- on the basis of average prices of crude and products in regional bulk markets as well as rupee-dollar exchange rate in the preceding fortnight.
The oil ministry has been considering daily revision since 2012, first reported by TOI on June 27 that year. But state-run retailers, in a complacent market of high oil prices, subsidy and lack of competition, were unwilling to implement it, citing lack of connectivity and infrastructure. Petrol pricing was freed from government control in 2010 by the UPA government. The NDA government deregulated diesel pricing in 2014.
Daily revision is expected to take the sting out of hikes as they would be in small doses. But more than that, the move has the potential to set off a price war and bring real competition in a market, 95% of which is controlled by public sector retailers. Revising prices daily will give public sector retailers a chance to match private companies who have been undercutting them in a free market.
Politically, daily revision will help the government sidestep the fallout of consumer ire that may follow a steep revision. It will also largely free state retailers from government intervention to suit political considerations.
Technically, oil companies have been free to revise rates since deregulation. But they are often "guided" by the parent oil ministry in line with the ruling dispensation's political considerations.