Oil Minister Dharmendra Pradhan today said the daily revision in petrol and diesel prices will continue despite petrol price spiking by Rs 6.6 per litre in two months.
Pradhan, who was yesterday elevated as Cabinet minister and given additional charge of Ministry of Skill Development and Entrepreneurship, said the daily revision immediately passes on the benefit of any reduction in international oil prices to consumers and avoids sharp spikes by spreading them in small doses.
He previously was Minister of State (with Independent Charge) for Ministry of Petroleum and Natural Gas. He is now the Cabinet Minister for Petroleum and Natural Gas.
"It is in the interest of consumers. I don't think that there is a need for change in it," he told reporters after taking charge as Minister for Skill Development.
State-owned oil companies in June dumped the 15-year old practice of revising rates on 1st and 16th of every month and instead adopted a dynamic daily price revision to instantly reflect changes in cost. Rates during the first fortnight dropped but have been on the rise since July 3.
While petrol prices have increased by Rs 6.6 to reach Rs 69.66 a litre in Delhi, the highest since August 2014, diesel rates have risen by Rs 4.02 to Rs 57.38.
"Daily revision in prices is good. When we started daily revisions on June 16, rates dropped in the first fortnight.
Thereafter it has increased mainly because of rise in global oil prices," he said.
Daily revision, he said, results in any drop in international oil rates being passed on to consumers immediately rather than having to wait for 15 days. In the reverse scenario when international oil rates rise, pump prices are hiked by few paise per day.
"Should prices be hiked by Rs 2.50 or Rs 3 per litre in one go or they should be spaced out in small doses," he asked.
The rate changes are being done on a transparent basis and city-wise prices are available through SMS, he said, adding the daily price change model best reflects the happenings in the market.
Pradhan also said his ministry is seeking approval of the safety organisations for starting home delivery of fuel.
"The issue involves safety and we have to first get their approval before a pilot is launched," he said. "We are trying to permission."
The government had between November 2014 and January 2016 raised excise duty on petrol and diesel on nine occasions to take away gains arising from plummeting international oil prices. In all, duty on petrol was hiked by Rs 11.77 per litre and that on diesel by 13.47 a litre.
The windfall from the excise duty hikes helped the government bridge its budgetary deficit.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)