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ISLAMABAD: The Petroleum Division of Ministry of Energy (MEPD) and Islamabad Policy Institute (IPI) on Thursday challenged each other over the rationale to upgrading petrol and diesel to Euro-V standards in the country and over the relevant specifications and processes for such improvements.
The debate started after the Islamabad Policy Institute (IPI) highlighted faults with the government decision to upgrade fuel to Euro-V standards and calling for a public debate before its formal implementation.
This was followed by a statement issued by the MEPD contesting the IPI’s findings as wrong presumptions. In response, the IPI followed up with yet another statement, claiming the MEPD explanations proved that authorities were actually unaware of what Euro-V meant and hence the case for putting on hold the new fuel introduction in the market.
The MEPD said the IPI wrongly presumed that the recent government decision for introduction of Euro-V petrol and diesel in the country was premature owing to limitations of the existing retail network and up-country storages, improperly defined Euro-V specifications.
It said the IPI was also incorrect in pointing out inadequate product testing capacity, the absence of Euro-V compliant engines and the burden on lower middle income consumers.
The MEPD said it was not introducing any new main grade for diesel and petrol, rather it had simply altered the product specifications in relation to sulfur contents, which will now be conforming to Euro-V standards instead of Euro-II at present. Therefore, the notion of the limitations of existing retail network and storages was irrelevant and out of context, as no special arrangements at outlets and storages were needed.
It said the Euro-V specifications had been finalised in consultation with all stakeholders especially oil industry and it was incorrect to call them improper. The MEPD said the imported products were tested at discharge ports by the the Hydrocarbon Development Institute of Pakistan (HDIP), which had updated its infrastructure by investing million of rupees while the Pakistan State Oil (PSO) had also updated its testing infrastructure conforming to Euro-V standards. “Eventually, HDIP and its testing capacity are in sync with the requirements for shifting towards Euro-V fuels”.
Commenting over the absence of Euro-V compliant engines, the MEPD said that ultra-low levels of sulfur contents resulted in reduction of lubricity and conductivity, which increased wear and tear of older engines and damages fuel pumps. However, addition of appropriate additives allows older engines to operate efficiently. Accordingly, the two additives have been appropriately incorporated in the government-approved specifications.
This will ensure better performance by the vehicles of lesser standards. The relevant stakeholders in the automobile sector have also admired the government decision, the statement said.
It said the IPI’s main argument about burden on the local consumers was incorrect and misleading. In fact, in view of its recent tender results for Euro-V petrol, the PSO had received prices either equal to or even below than the current deliveries of Euro-II petrol prices. Moreover, PSO’s tender participation also improved due to introduction of better fuels in the country. “Accordingly, no huge financial impact on general consumer or any negative effect on balance of payment is expected”.
The IPI said the Petroleum Division now “admits to the fact highlighted in IPI’s report that the specifications notified are not true Euro-V specs but are prevailing Euro-II in which only the sulfur content has been reduced”.