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Business News/ Industry / Manufacturing/  Oil ministry prepares road map for BS V fuel norms
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Oil ministry prepares road map for BS V fuel norms

Move comes even as state-owned oil marketers haven't been able to supply BS IV fuel to most of the country

The ministry will include the BS V proposal in the auto fuel policy, expected to be rolled out around July. The previous auto policy expired in April 2010.Premium
The ministry will include the BS V proposal in the auto fuel policy, expected to be rolled out around July. The previous auto policy expired in April 2010.

Greater Noida: The oil ministry is preparing a road map to introduce BS V fuel in at least the top three metros, a ministry official said on Tuesday, although state-owned oil marketers haven’t been able to supply BS IV fuel to most of the country.

The fourth Bharat stage (BS) emissions norms for vehicles were introduced in 2010 but the government hasn’t been able to make the shift completely due to the inability of Indian refiners to produce the fuel in large quantities.

BS IV petrol and diesel contain less sulphur, a major air pollutant, than BS III-compliant fuel and are critical to lowering pollution and improving air quality across the country. But while about 30 cities get BS IV fuel, the rest of India still buys BS III fuel.

The government’s move to bring in BS V despite this is seen as an attempt to catch up with various developed countries in the West that have already graduated to Euro VI norms, a level above BS V.

“A road map for the BS V fuel norms is expected to be prepared by the end of March. Then, we will discuss by when we can roll it out," R.K. Singh, joint secretary (refineries), ministry of oil and natural gas (MoPNG), said.

The ministry will include the BS V proposal in the auto fuel policy, expected to be rolled out around July. The previous auto policy expired in April 2010.

However, concerns over investment remain.

S. Roy Choudhury, chairman and managing director, Hindustan Petroleum Corp. Ltd, said graduating to any superior fuel requires a lot of investment, which may not be possible for the refiners to do. “It requires an investment of at least 2,500 crore to upgrade one particular refinery in order to produce superior fuel. If we do that, our margins are going to take a hit. So, who will compensate for that," Roy Choudhury said.

Oil firms invested 30,000 crore between 2005 and 2010 towards upgrade for supplying BS IV fuel. According to estimates by the petroleum ministry, oil firms will have to shell out 80,000 crore more to move to BS V.

Singh said the oil ministry will request the finance ministry to subsidize the amount invested by oil refiners in upgrading their facilities. “We cannot be asking them to invest (in upgrading the facilities) as they are already squeezed (for margins). The petroleum ministry will write to the finance ministry requesting them to subsidize this amount," he said.

Auto makers will also need to put in additional investments to make their vehicles compatible with BS V fuel, which will increase the cost of vehicles.

R.S. Butola, chairman and managing director of Indian Oil Corp. Ltd, pitched in for a nationwide rollout of BS IV.

“We have not been able to implement BS IV across the country. We would like to believe that government would focus on that. A majority of vehicles are still not eligible for BS IV norms," Butola said.

A total of 50 cities will be covered under BS IV by 2015, Mint reported in February 2012. The entire country is expected to be covered by 2017. The extension of the BS IV emission norms in 50 big cities also spelled the end of Maruti Suzuki India Ltd’s first small car—the Maruti 800. The car’s engine has not been upgraded to the BS IV norms.

According to the petroleum ministry, the additional cities to be covered under BS IV will be considered on the basis of “pollution levels and the vehicle population...inclusion of all state capitals and cities with population of more than one crore will be emphasized while selecting the additional cities for extension of BS IV auto fuels".

The industry body Society of Indian Automobile Manufacturers (Siam) is non-committal on the issue. Vishnu Mathur, director general, Siam, advocated for “one country, one norm" and agreed with Butola’s view.

“We do not want dual norms in the country to perpetuate. They should first implement BS IV norms across the country. If they do not do it, there will be a total chaos because if you drive a vehicle in Delhi and take it to some smaller city nearby, you won’t get the same fuel there. So, what’s the point? We advised the oil ministry to take a cluster approach and increase the radius of cities where superior fuel is available," Mathur said.

Utpal Bhaskar contributed to this story.

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Published: 15 Jan 2014, 12:16 AM IST
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