Price revision: Oil companies call dealers to discuss woes
- Author: Zachary Reyes Jun 12, 2017,
Jun 12, 2017, 16:58
A pilot project of daily revision of oil prices has already been implemented in Udaipur, Jamshedpur, Vishakhapatnam, Chandigarh and Puducherry from May 1. If the news is correct then it shall kill the petrol dealers involved in retailing of petroleum products in the entire country in one go.
The overall change in fuel costs will not be significant to the average consumer; the price is mostly going to change by a few paisa per liter per day, and this is expected to keep the fuel prices in tune with the changes in the global markets and the foreign exchange rates.
The petroleum dealers said under the daily revision of prices system, the dealers were not protected against capital loss and at the same time no mechanism for the automatic price change had been put in place for all petrol pumps.
Simon Williams - RAC fuel spokesman - said: "The cost of a barrel of oil fell to $47.15 on Wednesday [7 June] - the lowest price since early May - contributing to a 2p-per-litre reduction in the wholesale price of petrol since 24 May".
"...there are dealerships where a tank lorry takes 2-3 days to reach the retail outlet".
At the non-automated petrol pumps, dealers would get the updated price by way of four distinct means: customised SMSes, emails, mobile app and web portal for dealers.
Analysts, however, believe that inventory gains and losses will reduce for dealers after implementation of dynamic pricing as compared to the current scenario of fortnightly revisions.
Every day, dealers will have to stay at pumps until midnight, or deploy a senior employee, for changing prices, which means additional manpower cost and inconvenience as most petrol pumps shut before midnight, Bansal said. "Currently, retailers resort to inventory management, wherein they stock up when retail prices are about to increase, and draw down from inventory when prices are about to decline". Updated prices will be immediately exhibited at all petrol pumps for information of the public, the statement said.
The Federation of All India Petroleum Traders (FAIPT) said in a statement on Saturday: "Dealers of five cities where it [daily revision] was launched have already burnt their fingers".