Ministry plans to put off marketing of Euro II diesel
ISLAMABAD: While environmentalists are pushing for tightening vehicle emission standards, the Ministry of Petroleum has plans to delay availability of Euro II diesel in the market, Dawn has learnt.
The ministry had committed to make Euro II standard diesel available in the market by January 2012. But it is now looking to extend this deadline to 2014 or later. Euro II diesel defines the acceptable limits of environmentally hazardous ingredients in fuels, such as sulphur or nitrogen dioxide.
This waiver in their resolve to adopt better fuel standards has drawn criticism from the Ministry of Climate Change and the Pakistan Environment Protection Agency (Pak-Epa).
“If the government does not stick to its commitment, it will disrupt our working plan that we submitted to the Pakistan Environmental Council headed by the prime minister. The idea is to get all the oil refineries to upgrade their technologies to produce better quality diesel fuels to limiting dangerous emissions from vehicles into the atmosphere that cause serious environmental and health problems,” said Director General Pak-Epa Asif Shuja, adding another meeting with the Ministry of Petroleum and the oil refineries had been called on July 31for a clear-cut plan.
He said the plan was to adopt Euro II diesel with sulphur content as low as 0.05 per cent and do away with the present outdated diesel production in Pakistan.
“The diesel sold in the market today contains 0.5 per cent sulphur, which is very high,” said Mr Shuja, explaining how some countries in the region had adopted better Euro standard fuels to limit emissions into the atmosphere.
While Pakistan was stuck in the process of developing roadmaps beyond the current Euro I and Euro II standards, the Ministry of Climate Change explained how India had moved nationwide to Euro III fuels this year and China to Euro IV equivalent standards in 2008. India has already gone Euro IV in 13 major cities. However, adopting Euro standards in Bangladesh, Sri Lanka and Nepal are also quite slow.
According to a senior official in the Ministry of Climate Change, most oil refineries – Attock Oil Refinery, National Oil Refinery and Pakistan Oil Refinery – were running obsolete technologies. Parco, which has some 40 per cent market share alone, had started producing Euro II diesel with 0.05 per cent sulphur content. Bio Co had committed to upgrading its equipment by the end of this year.
However, oil refineries are hesitant to invest about $130 million to $200 million on the diesel de-sulphurisation plants depending on the size and capacity. They argued that with such heavy investments, and with the volume and price of the diesel being the same, the returns were too little.
They also argued that the ministries of climate change and petroleum were not on the same wavelength and that the Economic Coordination Committee (ECC) had already granted extension up to 2014 for Euro II standards.
“We will not break even after we pump $130 million. The Pakistan State Oil already owes Attock Oil Refinery Rs33 billion just like it owes other refineries in billions,” said the CEO of Attock Oil Refinery, Adil Khattaq.
He explained that the refineries were not against upgrading their technologies. “But worldwide, governments provide some support to refineries to upgrade their technologies and that is not coming in our case. We do not want to sell cheap fuels in the market and the idea is to move forward,” Mr Khattaq said, adding: “There have been several meetings on the issue. There is another after two days and we will soon find out how to work together on the issue.”