Oil marketing companies plan to revise petrol, diesel prices daily in 5 cities from May 1 and going forward a nationwide rollout is expected. To discuss this and the business outlook, CNBC-TV18 spoke to B Ashok, Chairman, India Oil Corporation (IOC).
The fortnightly price revisions of petrol and diesel are basically done to neutralise the changes in international prices and by passing on this revision in pricing, we have been able to maintain the trend of pricing with that of international and this has also helped us maintain the margins, said Ashok.
The gross margins have been maintained around USD 2-2.50 per barrel.
The decision of dynamic pricing that would be done on a daily basis in five cities is a pilot project. Five cities include Puducherry and Vizag, Udaipur, Jamshedpur and Chandigarh, So we would study the impact of that on market. However, it would benefit the customer by preventing sudden shocks and volatility and on the longer-term it would be a zero-sum game for customers, said Ashok. With regards to retailers also they would be less distortion and they would maintain stock as per their average sales etc.
The dynamic pricing would also help reduce the distortion in demand and supply for the oil marketing companies, said Ashok.
On the overall business front, he said volumes growth for the company in FY17 for all segments stood at 3 percent. Petrol grew by 8-10 percent, diesel demand was flat, LPG volumes great at 11-12 percent in FY17.
He is also upbeat on gross refining margins as well.
He said Chennai Petro has been performing well and currently the merger is work in progress.For more, watch video