ISLAMABAD: The government is considering introducing special low-grade petrol for motorbikes in the country, apparently as a solution to allow obsolete refineries to continue operations and provide a cheaper option to the owners of two-wheelers as oil prices increase.

Informed sources told Dawn that Prime Minister Imran Khan had directed his special assistant on petroleum Nadeem Babar to examine the proposal and practical matters to introduce 80-82RON petrol for two-wheelers. The proposal is reported to have been floated by Dr Abdullah Malik, an official of the Oil and Gas Regulatory Authority (Ogra).

Pakistan switched over to 92RON from 87RON petrol about two years ago to meet the international fuel standards. It had given up low-grade 82RON petrol at least three decades ago. Research Octane Number (RON) is an indication of quality of fuel and generally fuel with higher RON is supposed to be cleaner and of better quality.

Bike assemblers, oil marketing companies strongly oppose the idea

A petroleum ministry official said oil marketing companies were opposed to a low-grade fuel because it would require them to make investment in additional nozzles at all retail outlets, besides having separate storages across the country and maintaining the countrywide supply chain.

The Senate Standing Committee on Petroleum is taking up the matter on (Tuesday) today.

Nadeem Babar, who has held a couple of meetings on the subject, and petroleum division’s spokesman did not respond to calls for comment. Interestingly, Ogra and the automobile industry have distanced themselves from the move.

When contacted, a spokesman for Ogra said it was not the mandate of the regulator to suggest product specifications. “This falls under the jurisdiction of the petroleum division to approve product specifications,” he added.

Dr Abdullah Malik, who is also a senior research associate at Newcastle University London, told Dawn that he did not want to create hype on a national cause, adding that the energy ministry had to look into the subject that could reduce about $1 billion import burden annually. He said people had developed a habit of following imported solutions, otherwise there was no reason to use expensive high RON fuel meant for cars in motorbikes as well. He said that 80-82RON petrol could be introduced with a simple switch once the government issued a notification, adding that it was not his job as Ogra’s member oil to propose a new product, but had floated the idea in the national interest. He said that about 35-40 per cent of petrol consumption was in the motorbike segment. He said it was not true that higher number of products in the market could create problems and cited the example of China which had seven grades of petrol.

Moreover, the 80-82RON petrol proposed for two-wheelers would not mean that it would be of low quality. In fact, it would be better than Euro-II petrol because it would not contain any chemical or additive, he claimed.

Meanwhile, the Pakistan Automotive Manufactures Association (PAMA) — a representative body of all major manufacturers and assemblers of trucks, busses, cars, light commercial vehicles, two-wheelers and tractors — have strongly opposed the proposal.

In a representation to the petroleum division, the association said they had been told that majority of domestic refineries, having outdated facilities, were not able to efficiently produce higher RON fuels due to which they had to use an additive to fuels to increase RON which was imported.

If low RON fuels are introduced then import bill of those additives may be reduced. It will also help use unutilised capacity of oil refineries.

“This policy initiative (of 80-82RON) will be a huge step backward in a long-standing national goal of achieving international standards,” the PAMA said.

Published in Dawn, May 21st, 2019