Indian Economy News

IOC becomes 1st company to begin supply of BS-VI fuel across country

  • IBEF
  • March 23, 2020

Indian Oil Corp (IOC), the nation's biggest oil firm, has begun the supply of the world's cleanest petrol and diesel across the country with all its 28,000 petrol pumps dispensing ultra-low sulphur fuel a good two weeks before the April 1 deadline.

According to IOC Chairman Mr Sanjiv Singh, "We have successfully rolled out the supply of BS-VI grade fuel across the country."

"All our 28,000 petrol pumps across the country are dispensing BS-VI grade fuel for more than a week now."

Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL), are among other retailers that will switch to the cleanest fuel within this week and will be supplying BS-VI grade fuel.

The deadline for starting supply of Euro-VI emission compliant fuels has been set as 1st April 2020 by the government. With this India joins the select league of nations using petrol and diesel containing just 10 parts per million of sulphur to cut vehicular emissions that are said to be one of the reasons for the choking pollution in major cities.

"We have leapfrogged from BS-IV (equivalent to Euro-VI grade fuel) straight to BS-VI in just three years," the IOC chairman said.

Around half of the country’s fuel market is controlled by the company. Almost all the company's refineries began producing ultra-low sulphur BS-VI (equivalent to Euro-VI grade) petrol and diesel by the end of 2019 and then the mammoth exercise was undertaken to replace every drop of fuel in the country with the new one.

"We have achieved the switchover without a single disruption," he said.

In 2010, Euro-III equivalent (or Bharat Stage-III) fuel with a sulphur content of 350 ppm was adopted by India whereas it took seven years to move to BS-IV that had a sulphur content of 50 ppm. Although, the shift from BS-IV to BS-VI took just three years.

"It was a conscious decision to leapfrog to BS-VI as first upgrading to BS-V and then shifting to BS-VI would have prolonged the journey to 4 to 6 years. Besides, oil refineries, as well as automobile manufacturers, would have had to make investments twice - first to producing BS-V grade fuel and engines and then BS-VI ones," he said.

In order to upgrade the plants, state-owned oil refineries invested about Rs 35,000 crore (US$ 5.01 billion) so that could produce ultra-low sulphur fuel. This investment is on addition of Rs 60,000 crore (US$ 8.58 billion) the company has spent on refinery upgrades in the previous switchovers.

The sulphur content of BS-VI is just 10 ppm and emission standards are as good as CNG.

Earlier, it planned to supply BS-VI fuel to Delhi and its adjoining towns by April 2019 and the rest of the country was to get the same supplies from April 2020. But oil marketing companies switched over to supply of BS-VI grade fuels in the national capital territory of Delhi on April 1, 2018.

And on April 1, 2019, the supply of BS-VI fuels was further extended to four contiguous districts of Rajasthan and eight of Uttar Pradesh in the National Capital Region (NCR) and BS-VI grade fuels were made available in seven districts of Haryana from October 1, 2019.
It is estimated that this new fuel will reduce NOx in BS-VI compliant vehicles by 25 per cent in petrol cars and by 70 per cent in diesel cars.

A fuel upgradation programme was adopted by the country in the early 1990s. Low lead gasoline (petrol) was introduced in 1994 in Delhi, Mumbai, Kolkata and Chennai. On February 1, 2000, unleaded gasoline was mandated nationwide.

Similarly, BS-2000 (Euro-I equivalent, BS-1) vehicle emission norms were introduced for new vehicles from April 2000. BS-II (Euro-II equivalent) emission norms for new cars were introduced in Delhi from 2000 and extended to the other metro cities in 2001.

There has been progressive decrease in Benzene limits from five per cent in 2000 to one per cent nationwide. Lead content in gasoline was removed in phases and only unleaded gasoline is being produced and sold from February 1, 2000.

The significance of the octane number of gasoline is to improve the performance of the engine. Loss in octane number due to phasing out of lead was made up by installing new facilities in the refinery and changes in refinery operation. RON (Research Octane Number) of gasoline for BS-2000 spec was increased to 88. This has over time been increased to 91.

Mr Singh said sulphur reduction will reduce Particulate Matter (PM) emissions even in the in-use older generation diesel vehicles.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

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