Dynamic fuel pricing: Dealers feel heat over increased risk, lower profits

A fortnight into public sector oil companies offering dynamic fuel price change at five cities in the country, oil companies see no red flags, but dealers may be already feeling the heat. State run oil companies have been offering the dynamic fuel price model at five locations-Pondicherry, Chandigarh, Jamshedpur, Udaipur and Vishakhapatnam since May 1. Though the practice is common globally, this has been introduced in India as a pilot project in the five locations. "We have not received any feedback -- both negative and positive. So, it is doing well and also too early. No decision has been taken on the full roll out. There has been no issue in terms of implementation," said a marketing official from one of the three PSU oil companies. Nifty Trading Tips

This step from state-run companies has also seen private fuel retailers follow suit. Essar Oil, for instance, is offering the same fuel pricing at its pumps in these five locations. Reliance Industries, according to sources, is also offering dynamic fuel pricing at some of its outlets. "We are currently having a pilot run of the scheme and dealers have been asked to submit the report on a daily basis. Once the pilot stage is over, we will come up with an overall report and take a call on the national launch," said B Ashok, chairman, Indian Oil Corporation. Future & Option Trading Tips