From May, oil marketing companies are expected to introduce a daily revision of petrol and diesel prices in select markets, on a pilot basis.

Reports suggest that outlets in Puducherry, Visakhapatnam (Andhra Pradesh), Udaipur (Rajasthan), Jamshedpur (Jharkhand) and Chandigarh will be the first to see this dynamic pricing.

In many countries, auto-fuel prices move in sync with the price of crude oil. Now, state-run fuel retailers revise prices on the 1st and 15th of every month based on average international price of crude in the preceding fortnight and the currency exchange rate.

BusinessLine had reported on April 12 that the dealer network will be at the receiving end. The issue is how prepared they are, technically. The country could end up with a situation akin to the cash crunch at ATMs, which were not calibrated to meet the specifications of the new currency notes.

Dealers sceptical “It will not be possible to implement this pricing methodology manually. There are 40,000 automated petrol and diesel retail outlets out of the approximately 56,000 total fuel outlets (in the country),” said Ajay Bansal, President of the All India Petroleum Dealers Association.

Of the 40,000 automated outlets, network connectivity issues will be a hindrance in implementing the revisions, Bansal added. Usually, dealers approach oil marketing companies every other day to meet their requirements. With the daily price revision, the windfall gain or loss to retailers will be wiped out, he said.

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