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Daily revision of oil prices won’t hurt petrol pump dealers: HPCL

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Source: The Economic Times
Tuesday, June 13, 2017

 NEW DELHI: The decision by Indian motor-fuel companies to revise prices everyday wouldn’t financially hurt retailers, state-run Hindustan Petroleum said Monday, seeking to address concerns that the move would inflate administrative costs for the dealers. 


Executives at state-run oil companies plan to meet petrol pump dealers Tuesday to explain the benefits of daily price revision. Dealers are protesting the decision to daily revise the prices of petrol and diesel from June 16, arguing that filling stations would incur additional costs in implementing the changes, and such frequent price fluctuations could dent their profit. 

At present, companies change prices fortnightly across the country, aligning them with international rates and factoring in currency fluctuations. “The daily price mechanism is no doubt a challenge to them, since a number of dealers of petrol pumps that are not automated are still manually changing the prices in the dispensing units whenever required. Efforts are on to bring all such petrol pumps under automation,” HPCL said. 

Motor-fuel retailers have demanded companies automate all filling stations so that prices can be centrally changed without the intervention of dealers. About a fifth of the petrol pumps are linked to centralized servers, and there no challenge in changing prices, at the stroke of midnight, in these cases. “There isn't much in the thought that dealers would suffer financial loss when the everyday price trend was downward, as the same dealers would gain when the daily price trend was upward,” said HPCL. 

The retailers' association has argued that the dealer or a senior staff would have to stay at petrol pump until midnight for changing prices. This would mean additional manpower costs and inconvenience, as most petrol pumps shut before midnight. The process to change prices will result in pumps stopping to dispense fuel for 30 minutes to an hour daily, leading to chaos and loss of business, retailers have said. 

“In fact, dealers will have to run their business with more efficient staff for daily price changes in the dispensing units. More efficient staff may require higher wages, but the dealer would benefit in the long term as such staff are likely to handle their customers well, which would benefit the dealer,” HPCL said. 
Both the trade and customers would benefit from daily price changes, as the rude shocks of large, fortnightly price movements would disappear, HPCL said. 


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