Refiners may start BS VI fuel sale ahead of deadline
New Delhi: Oil refineries have less time than earlier expected for shifting to BS VI grade fuel.
The oil ministry and state-owned refiners have agreed to start marketing BS VI grade fuel from September 2019, at least six months prior to the government deadline of 1 April 2020, as it takes months to clear out existing fuel with higher sulphur content from the entire supply chain up to the farthest filling station in the country, an official involved in the discussions said on condition of anonymity.
The idea is to make sure the higher grade fuel aimed at reducing emissions doesn’t miss the original 1 April 2020 deadline anywhere in the country, while auto makers are making changes to engine designs to suit the new fuel quality requirement.
Companies agreed to supplying BS VI grade fuel ahead of the deadline as the fuel that remains in the storage tanks starting from the ones at refineries to the underground storage at petrol pumps and in transportation pipelines gets mixed with the superior quality fuel, resulting in a fuel that has sulphur content somewhere in between. It takes months to eliminate the older fuel entirely from the system, with every top-up bringing down its presence by a fraction, explained the official.
Indian Oil Corp. Ltd, the largest refiner, said it is making huge investments in making the transition in fuel quality. “In BS VI, sulphur content will come down to 10 parts per million (ppm) or less. This should be seen in the context that around year 2000, we were marketing diesel with 1% sulphur content, equivalent to 10,000 ppm. This is a significant upgradation in quality in 20 years. The auto industry is working in parallel to make sure vehicles are also in line with the BS VI requirement,” said chairman B. Ashok.
Oil minister Dharmendra Pradhan had said in January, 2016 while announcing the migration of BS IV directly to BS VI, that state-owned refineries will be investing Rs28,750 crore for the transition. For shifting to BS VI norms, which will cover the entire country by April 2017, refiners had spent about Rs35,000 crore, according to data with the oil ministry.
According to Gaurav Karnik, partner, EY, the auto industry is clear about BS VI compliance and are working towards meeting the 1 April 2020 deadline. Some car and two-wheeler makers with access to the high end technology may adopt it earlier. “One of the key challenges for the industry is to meet higher costs of the advanced technology,” said Karnik.