The Hindu Business Line : Refiners told to reassess position on BS III fuel

Snapshot
Though supplies of BS III fuel will not be a problem for the 14 cities, it will be difficult in other parts
Oil Ministry panel is firmly of the view that BS III can only be implemented by October 1, 2010

Murali Gopalan

Mumbai, Oct. 14 While it is a near certainty that supplies of Bharat Stage III petrol and diesel will be possible only from October 1 next year, the Centre has asked oil refiners to reassess the situation before reaching a final conclusion.

“This is to ensure that all the homework is done thoroughly before a case is made out before the Supreme Court seeking an extension to the present deadline of April 1, 2010,” oil industry sources told Business Line.

Present ground level realities suggest that none of the refining companies (both in the public and private sector) will be in any position to meet the April 1 deadline for supplies of BS III auto fuels nationwide. This will be especially difficult in Bihar, Uttar Pradesh as well as in parts of the East (including the North-East) and South.

On the other hand, supplies of BS IV petrol and diesel for the 14 major cities will not be a problem with the refiners geared to meet the challenge.

Despite this, the Centre still wants to make sure that there is no possibility of BS III fuels being available before October 1 which is the refiners’ stand. “There should be no ambiguities on this account when a request is made to the Supreme Court to defer the date on BS III,” sources said.

The refiners are expected to get back with their reports by the end of this month though it is clear that none of them will revise the present projections. While some would still be able to supply BS III petrol and diesel from April 1 next year, as stipulated by the Supreme Court earlier, the key is to make sure that the fuels are available across the country.

Apex court call

Eventually, it is the Supreme Court that will take the final call on the revised deadline. If it is not convinced about the refiners’ projections, then the original deadline of April 1, 2010 stays for both BS III and BS IV.

“It is this thought that is giving the refiners nightmares because the whole supply process will turn catastrophic,” sources say.

In fact, the panel set up by the Petroleum Ministry to study the issue is firmly of the view that BS III can only be implemented by October 1, 2010. This fuel is now confined to 11 cities which will, from April 1 next year, move to BS IV. The rest of the country is supplied BS II petrol and diesel and will graduate to the BS III fold.

Auto sector concern

However, the auto sector is getting worried over the clean fuel issue especially with the prospects of BS IV fuel coexisting with BS II if the deadline for BS III is extended to October 1, 2010. This is primarily because cars fitted with the BS IV emissions equipment stand the risk of severe damage if supplied BS II fuel beyond the purview of the 14 cities.

“The difference in sulphur content is enough to ruin the vehicle. It is all right to have a situation of BS III and BS IV because the particulates differential would not be so high,” an industry source said.

The auto industry is equally apprehensive about a scenario where all three fuels — BS II, BS III and BS IV — are available across the country and different categories of vehicles must be manufactured as a result. Though BS II will be drained out of the system eventually, the worry is the timing of its exit.

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