Petrol, diesel prices to change on daily basis from mid-June across India: Report

Oil marketing companies (OMCs) will extend the new pricing mechanism for diesel and petrol across the nation from the second fortnight of this month, The Financial Express reported on Thursday.

According to the report, the likely date for pan India rollout of the new mechanism is June 16.

On May 1, state-owned oil retailers Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) launched a pilot project to revise petrol and diesel prices on a daily basis in five select cities - Udaipur, Jamshedpur, Chandigargh, Vizag and Puducherry.

Earlier in April, executives of the country's biggest oil marketing company Indian Oil Corp and its two smaller peers Bharat Petroleum and Hindustan Petroleum said that the firms were considering ways to roll out the plan to review petrol and diesel prices daily.

The daily price change also known as dynamic fuel pricing means the companies will not wait for a fortnight to adjust the price of petrol and diesel in tandem with crude price as they do now. Instead, they will change the price everyday based on crude price movements. This will help India move to an international standard of fuel pricing.

"This will cushion the companies from any loss they face due to currency and crude movements over a 15-day period and will make their margins more predictable," said Dhaval Joshi, analyst with Emkay Global Financial Services. The move would free private players - Essar Oil and Reliance Industries, which currently follow the price set by state-owned companies, to also shift to a dynamic model.

Currently, oil marketing firms fix the prices of diesel and petrol on a fortnightly basis.