Supply of the eco-friendly, primarily low sulphur, and also relatively costlier Bharat Stage-IV petrol and diesel is to be extended to 24 more cities by March next.
The Ministry of Petroleum and Natural Gas says this is being done as it wants to go beyond the Auto Fuel Policy 2003 recommendations. As mandated by the policy, BS-IV fuels were launched in the National Capital Region and 13 cities since April 2010.
Based on the report of a committee it constituted to identity 50 more cities, the Ministry took the higher grade fuels to 26 more cities, starting with seven in 2011-12. The criteria were most polluted cities, State capitals and cities with a population of over a million. The same parameters remain for the rest of 24 cities.
The journey, however, has been far from smooth, riddled with delays considering the time taken to ensure uninterrupted availability of the higher grade fuels and fine-tuning the logistics. Introduction of BS-IV fuels is about a transition from BS-III that also adds a marginal load to the retail price. Oil industry officials say the roll out, in the 39 cities, had been challenging and entailed substantial investments, especially in refineries.
Information provided to Parliament shows investment in upgrading refineries for producing BS-III/IV auto fuels was Rs.32,000 crore. This was over about ten years. Even as the government plans to extend the supplies calls for more funds, public sector refineries and oil marketing companies yearn for appropriate returns on such investments. “The returns have been poor,” standalone refinery CPCL’s Managing Director A. S. Basu says. More clarity on the reimbursement, senior officials in the industry say, is needed as the government looks to phase out BS-III fuels in more cities. As per the statistics for the first nine months of last fiscal, share of BS IV petrol in total consumption was 24 per cent while in the case of diesel it was 17 per cent. In 2013-14, total petrol consumption was 17.12 million tonnes and diesel 68.36 million tonnes.
A Ministry announcement recently, on the BS-IV fuels, also said the expert committee, headed by Planning Commission Member Saumitra Chaudhuri, for drafting the Auto Fuel Vision and Policy 2025 was likely to submit its report ‘very shortly’.
