Petrol prices were freed from government control last month resulting in a Rs 3.50 per litre hike in rates in Delhi, but modalities of subsequent retail price adjustments were left to the industry to deliberate and decide.
Sources said Indian Oil, Bharat Petroleum and Hindustan Petroleum on Thursday began consultations on modalities like the frequency or interval at which prices will be revised and if the PSUs should have uniform rate that would change on same date.
Private firms Reliance Industries, Essar Oil and Royal Dutch/Shell too are being consulted in the exercise. Sources said most retailers favour fortnightly revisions in retail rates to reflect changes in cost of raw material (crude oil), but the nation's largest oil firm IOC was at variance, wanting rates not to be revised too often.
Those in favour of a 15-day cycle for price adjustment argue that oil firms already have a mechanism of calculating the desired fuel prices on 1st and 16th of every month. Also, rates of aviation turbine fuel (ATF), which was freed from Government control in 2002, change with cost every fortnight.
But IOC does not want frequent price changes, saying a fixed date for revision may lead to hoarding at pump end.
Sources said modalities are likely to be finalised by next week and pump rates would be revised accordingly.
An Empowered Group of Minister headed by Finance Minister Pranab Mukherjee had on June 25 decided to free petrol and diesel prices from government control.