State-run oil companies, including Hindustan Petroleum, Indian Oil Corporation and Bharat Petroleum Corporation Limited have agreed to revise the fuel prices every day starting from June 16th. The oil companies have already been running this as a pilot in 5 cities across India.
The 3 state run companies had started the dynamic pricing in 5 cities including Pondicherry, Chandigarh, Jamshedpur, Udaipur and Vishakhapatnam from May 1. Following the example of these companies, private players like Reliance and Essar had also launched the same in above mentioned 5 cities.
Though the move is considered to be on the lines of global practices, a lot of dealers are said to be against the move. Speaking on the development, A D Sathyanarayan, president, the Consortium of India Petroleum Dealers (CIPD) said that all the petrol pumps in India are not automated and that is set to affect the margins of dealers. Also, the concern will be the management of inventory in case the prices go up.
State-owned companies manage over 90 percent of all the fuel stations in India. Out of the 56,190 fuel stations in the country, 52,604 are owned or marketed by the 3 big names in India. Private players in this sector include Essar, Shell and Reliance.