From May 1, you will be paying different rates for petrol and diesel daily, similar to what happens in many advanced markets, after state oil companies confirmed their plan to review rates daily to align them with international prices.
Where will this dynamic pricing start first?
The plan will be rolled out on a pilot basis in Puducherry, Vizag in Andhra Pradesh, Udaipur in Rajasthan, Jamshedpur in Jharkhand and Chandigarh
What was the price change routine earlier?
Fuel retailers used to revise rates on 1st and 16th of every month based on average international price of the fuel in the preceding fortnight and currency exchange rate.
Is it technically possible to change rates every day?
Yes, The automation at most filling stations, which allows companies to centrally change prices, as well as the availability of digital technologies and social networks have made it much easier for companies to convey price changes to their 53,000 filling station across the country.
How did they do it earlier?
Price transmission used to be a cumbersome exercise in the past with dealers waiting for phone calls and fax messages from companies for new prices and then rushing to lower or raise their supply orders, causing inconvenience to suppliers.
Do you really have to worry about price changes?
Not really. Daily changes mean prices wouldn't rise or drop sharply. Prices would change just by a few paise every day, bringing no shock to customers. This means companies can easily take price hikes without worrying about political backlash.
Why did they do it?
A price hike is often held back during election season as it is seen as detrimental to the interest of the ruling party. To compensate oil companies for that, the government allows them to keep prices higher even when an alignment with international rates may warrant a decrease
