The recent petrol price hikes have left a big hole in every body's pockets. Although there was a slight reduction in prices soon after the recent hike, there has not been a single price cut despite crude oil price in the international markets coming down.
The government of India is reportedly working on a proposal to oil companies on fixing petrol prices on a daily basis. The proposal is aimed at modifying petrol prices based on international crude oil prices on the day. The government believes such a measure will help oil companies respond to crude oil price cuts immediately thus passing on the benefits to buyers.
The daily monitoring and changing of petrol prices will also mean oil companies can impose small hikes on petrol that will not hurt buyers hugely. However, if crude oil prices experience a regular increase, petrol prices will also move upwards on a daily basis.
Modifying petrol prices on a daily basis can be considered as a difficult exercise. Petrol price is not only based on the crude oil prices but also exchange rates. Even if crude oil prices come down petrol prices might not come down if the value of the Rupee drops.
Crude oil prices have come down considerably since the last petrol price hike. However, the huge drop in the value of the Indian Rupee has forced oil companies to defer a price cut. Reports say the next price cut will be a sweet Rs. 4 which is indeed an incredible news for motorists.
Oil companies are still considering the government's proposal. If they accept to follow this system, then motorists will have to handle frequent changes in petrol prices. So Petrol prices hikes and petrol price cuts will not be a monthly or fortnightly affair but a daily one.