Euro VI petrol to raise refiners’ cost by Rs 1.40 per litre
Refineries will incur an incremental production cost of Rs 1.40 and Rs 0.63 for a litre of Euro VI-compliant petrol and diesel respectively, said a senior executive at Indian Oil Corporation (IOC), the nation’s largest refiner.
In response to the rising air pollution level and a clamour to control vehicular pollution, the government has set a deadline of April 2020 for refiners to make available fuel complaint with the Euro VI emission norms across the country. “It’s an extremely challenging task but we will be able to meet the deadline,” said Sanjiv Singh, director (refineries) at IOC.
At present, nearly 35% of petrol and diesel sold in the country meet the Euro IV norms.
By March 2017, Euro IV-compliant fuels are expected to be available across the country.
IOC is spending about Rs 7,000 crore in upgrading all its refineries to Euro IV level. It plans to spend another Rs 13,000-14,000 crore on upgrading from Euro IV to Euro VI level.
Besides capital spending, the higher grade fuel would also require additional internal energy consumption pushing up the operational expenditure.
The refineries are working with consultants on firming up the plan and would take about four years to implement the upgrade.
Making changes in an existing refinery is far more challenging than starting a greenfield project, Singh said, adding that safety issues and, in some cases, space constraints become hurdle.