Lok Sabha Question No. 136 (UNSTARRED), answered on 2017-07-17
Subject: Daily Pricing of Petroleum Products
Ministry: PETROLEUM AND NATURAL GAS
Asked by: NINONG ERING, PRAHLAD SINGH PATEL, DUSHYANT CHAUTALA, SANJAY SHAMRAO DHOTRE, R. GOPALAKRISHNAN, ANTO  ANTONY, SATYA PAL SINGH, PINAKI MISRA, NAGARAJAN P., JYOTIRADITYA MADHAVRAO SCINDIA, SAUGATA ROY, KOTHA PRABHAKAR REDDY

## LOK SABHA

## UNSTARRED QUESTION NO. 136 TO BE ANSWERED ON 17 TH  JULY, 2017

## DAILY PRICING OF PETROLEUM PRODUCTS

## 136. SHRI NINONG ERING:

SHRI PRAHLAD SINGH PATEL:

SHRI DUSHYANT CHAUTALA:

SHRI SANJAY DHOTRE:

SHRI R. GOPALAKRISHNAN:

SHRI ANTO ANTONY:

DR. SATYAPAL SINGH:

SHRI PINAKI MISRA:

SHRI P. NAGARAJAN:

SHRI JYOTIRADITYA M. SCINDIA:

PROF. SAUGATA ROY:

SHRI PRABHAKAR REDDY KOTHA:

## isVªksfy;e vkSj izkÑfrd xSl ea=h

## Will the Minister of PETROLEUM AND NATURAL GAS be pleased to state:

- (a) whether the Government/State run Oil Marketing Companies propose to revise the price of petrol and diesel on daily basis together with international crude oil rate in the country;
- (b)  if  so,  the  details  thereof  and  the  reasons  therefor  along  with  its  likely  impact  on  the common man, inflation/ essential commodities and petroleum companies;
- (c) the details of mechanism put in place by the Government to communicate daily pricing of petrol  and  diesel  to  the  consumers  in  order  to  increase  the  transparency  and  remove manipulation by petrol pump owners including monitoring of such revision in the country;
- (d) whether the customers/consumers of petrol and diesel are not given the actual benefit that accrued to oil companies by importing the same at low prices and if so, the details thereof along with the corrective measures taken/proposed to be taken by the Government;
- (e) whether the Government has received requests/suggestions from various quarters in this regard and if so, the details thereof along with the response of the Government thereto; and
- (f)  whether fuel outlets are reportedly facing difficulties for want of centralised software to compute the rates on daily basis, if so, the details thereof and the steps being taken by the Government to alleviate the problem?

## ANSWER

## isVªksfy;e vkSj izkÑfrd xSl ea=h ( Lora= izHkkj ) ¼Jh /keZsUnz iz/kku½

## MINISTER OF STATE (I/C) IN THE MINISTRY OF PETROLEUM AND NATURAL GAS (SHRI DHARMENDRA PRADHAN)

( a)&(b): Public Sector Oil Marketing Companies (OMCs), namely, Indian Oil Corporation  Limited,  Hindustan  Petroleum  Corporation  Limited  and  Bharat  Petroleum Corporation  Limited  have  implemented  daily  revision  of  retail  selling  price  of  Petrol  and Diesel in the entire country effective 16th June, 2017.

Daily price revisions of Petrol and Diesel make the retail prices more reflective of the current market conditions, minimizing the volatility in the RSP of Petrol and Diesel.  Further, it leads to increased transparency in the system and enables smoother flow of products from refinery/depots to Retail Outlets.

- (c): Public  Sector  OMCs  have  established  an  appropriate  mechanism  for  conveying  the prices to consumers every day, including daily updates at their websites, prominent displays of prices at the retail outlets, sending of price related SMS to toll free number, Mobile apps etc.
- (d) & (e): The prices of Petrol and Diesel have been made market determined effective 26 th June, 2010 and 19 th October, 2014 respectively.   Since then, the Public Sector OMCs take appropriate decision on pricing of Petrol and Diesel in line with their international prices and  other  market  conditions.  Public  Sector  OMCs  are  at  present  applying  Trade  Parity Pricing methodology to compute the RSP.  Other cost elements in the RSP of Petrol & Diesel viz Excise Duty, BS IV premium, marketing cost and margins etc. are specific costs which do not  increase/decrease  with  the  volatility  in  international  prices  of  Petrol  and  Diesel.  The element of excise duty  which is specific in nature has been increased.    Most of the State Governments have also increased VAT on Petrol and Diesel.  After taking into account these factors,  Public  Sector  OMCs  have  passed  on  major  portion  of  the  decrease  in  price  to  the consumers of Petrol and Diesel.
- (f):   As per Indian Oil Corporation Limited, centralized software is available and RSPs are being communicated on daily basis to RO dealers.