With the advent of daily change in fuel prices, there is yet another update to frequently check. Smart to cash in on the new fad, there are websites, widgets and apps that are posting frequent updates. People are praising the move and discussing the benefits of it with many stating how this development will make fuel prices in our cities more realistic and aligned to global crude price. I am not sure how the dynamic price is linked to global crude price, given the various other taxes that go into pricing of fuel at the fuel pump.
For oil marketing companies (OMC), the exercise has been one more tick against a project that has been successfully executed. The daily price change is not in the interest of a regular consumer, because with such a frequent change, he will tend to start gambling on which day to fuel up, an unnecessary exercise. The move is not as effective as the move in 2010 was, that changed the way interest was calculated in a savings bank accounted from monthly to daily balance. Unlike the savings bank interest rate, the daily fuel price will make the fuel price akin to stock market movements.
Active users of social media would know about ‘I owe you’ syndrome, wherein people like an update the moment it goes up. The annoying Facebook updates will be replicated to fuel price updates with people posting about how they got fuel for a low price compared to others. This fad too shall pass, as many people will soon realise that they will never be able to clearly account for the few paisa savings they would eventually have by refuelling their vehicles based on the daily fuel price change. In fact, if one were to take into the costs associated with checking updates to find the best day to refuel, one would actually be spending more on this futile exercise.
One of the often made statements with investing – spend time in the market and not time the market, applies to this mad chasing of price with fuel and then refuelling also. The economic impact of frequent change in fuel prices is yet to be ascertained, but if I were to draw a parallel from stock markets, where price change is the only constant – this move is more likely to harm some people than benefit the masses. Fuel prices impact our lives, mostly with the price of vegetables and other products that go into arriving at the inflation basket.
On a different note, I will not be surprised if some enterprising youngster will develop an app of some such thing which will start indicating the cost of travelling by autos and cabs on a daily basis. The smart cabbies will implement the price when fuel price goes up, but will not do the opposite when it goes down. Those who remember, this government did not reduce fuel prices even when the crude was falling to new lows; so, how can we expect private players to do something similar.
As for us common lot, the daily price variation of fuel price is one more activity that will get included to our routines, with no clear outcome on benefits. Just the way one watches the rain forecast, one would start reading the daily change in fuel prices and wonder when it will go to a level where one can safely feel the disinterest to stop tracking it daily.