Search This Blog



AddThis Social Bookmark Button

Will the deadline for Bharat Stage III fuels be extended?  

Mumbai, Sept. 28 The panel set up to study implementation of clean
fuels in India from April 1, 2010 will recommend to the Petroleum
Ministry that the deadline for Bharat Stage III fuels be extended to
October 1, 2010. On the other hand, there are no issues about BS IV
supplies in 14 cities from April 1. "It is best in the interests of
all stakeholders that the deadline for BS III be deferred," top
sources told Business Line.

If this were to happen, a small part of the country will come under
the BS IV umbrella while the rest will continue using BS II petrol and
diesel. There is no reason why BS III, now available in 11 cities till
March 31, 2010, will not continue to be sold either since refiners
cannot stop its production overnight.The news will rattle
manufacturers of cars, trucks and utility-vehicles because this will
lead to a situation where all three fuels — BS II, BS III and BS IV —
are retailed in the country. "How do we plan production schedules for
BS II vehicles which will become irrelevant anyway in 2010? And what
happens to a new BS IV car if the driver has to fill it with BS II
fuel in some remote part of the country? It will end up damaging the
emissions equipment," an auto sector executive said. The best bet,
according to him, is to have both BS III and IV deadlines extended to
October 1, 2010.

Apex court nod

The panel entrusted with the task of the clean fuels timetable is
scheduled to update officials of the Petroleum Ministry on Thursday.
Any request for pushing the date beyond April 1 next year will need
the approval of the Supreme Court at least three to six months in
advance.Within oil industry circles, there is a fear that the
suggestion to extend the deadline to October 1 may fall on deaf ears
within some sections of the Government. "If that happens, it will just
end up being a logistical nightmare across the country," sources said.

Auto industry fears

The auto industry has made it known that it will need to be told of
any change in the clean fuel deadline well in advance, and not at the
last minute, since the process of fitting vehicles with the new
equipment is a difficult exercise. "We are worried that BS III
vehicles will be lying redundant in our plants if the fuel is not
available across the country," a company official said.It is not as if
the exercise of clean fuel supplies will be confined to the refiners
and the auto industry. It is imperative that the Railways are equipped
for this task in terms of additional wagons to carry the fuel from
inland refineries. Those in coastal locations will require more ships
and extra capacity at ports for transporting the fuels."The planning
required for supplies of BS III to other parts of the country, beyond
the 14 cities which will come under the BS IV ambit, is so difficult
and complicated that we need at least a year longer to get
infrastructure in place," sources said.

Local availability ::: Incidentally, there is no issue on local
availability of BS IV fuel from April 1. There were reports doing the
rounds that this requirement would be met wholly by imports but
refiners have clarified that this is not the case. "We can comfortably
produce all the BS IV fuel for the 14 cities from April 1, 2010," an
oil sector executive said.
In the case of BS III, some refineries in the East and South still
need to get critical infrastructure installed to ensure timely
supplies of petrol and diesel. This is why there is apprehension about
availabilities of the fuels in central India as well as parts of the
North, East and the North-East. The ball is, finally, in the Petroleum
Ministry's court. If it goes by the Committee's recommendations, the
next step is to approach the Supreme Court and get a deferment of the
date. On the other hand, if it drags its feet on the issue or believes
that this task still can be carried out, there could be trouble ahead.

Murali Gopalan from the pages of HINDU BUSINESS LINE newspaper.

AddThis Social Bookmark Button

Eco- friendly zappers to eat up oil slick  

INDIAN Oil Corporation ( IOC) is rushing a team armed with oil- eating
natural bacteria to tackle the oil spillage at Paradip from the ship
Black Rose that sank near the port on September 9. Anand Kumar,
director ( R& D) said IOC has developed special bacteria at its R& D
centre in Faridabad, which feed on oil and reduce it to eco- friendly
natural soil.

These " oil zappers" have been developed to eat up the oily sludge
that is left as waste in the companys refineries after crude oil has
been refined into petroleum products such as petrol, diesel and LPG.
Kumar said the bacteria are very effective on land. " We are confident
that portions of the oil slick that have reached the shoreline will be
neutralized in a matter of days through this " biomediation"
technology," he added.

IOC has also developed a strain of bacteria that can operate under
saline conditions in the laboratory. However, these have not been
tried out at sea. So, the current crisis will also provide the team
with an opportunity to test the bacteria on the spillage that is
floating on the sea and has not come to the shore.

The IOC team will first assess the situation and see how much of the
bacteria are required. The bio- reactors at the Faridabad R& D centre
will then be used to produce the requisite quantity.Samples of the oil
slick will also be taken and sent back to the R& D centre to improve
the effectiveness of the strains while the operation to contain the
oil spillage is on.

He said IOCs R& D centre has vast experience in containing and
controlling oil sludge.Around 70,000 tonnes of oil sludge has been
treated successfully at the IOC refineries since 1995 when the
technology was first introduced.Kumar has informed Paradip Port Trust
chairman K. Raghuramaiah that the IOC team will reach Paradip on

IOC had got in touch with the port authorities as fears of a major
environmental hazard have arisen over the oil leaking from the
ship.This eco- friendly technology developed jointly by IOC and TERI
has won a UK award in 2003. Efforts are also being planned to contain
the spread of oil on the high seas by restricting it to particular
manageable spots.

This " oilivorous" technology consisting of natural bacteria is safer
to handle as it has no disease- causing organisms.The technology
available works extremely well on oil spillage on land as the
specialized bacteria cultured in the laboratory remain localized and
attached to the targeted molecules of hydrocarbon.

However, extending the same application on aquatic or marine systems
where the conditions are altogether different in terms of nature of
medium ( microbes doesn't thrive and survive effectively in saline
water) requires a more focused approach and specialized
application.Currently, IOC and TERI are working on an Indo- Australian
joint project to extend the scope of the technology to aquatic and
marine systems as India has a large coastal belt and numerous sea
ports that handle transportation of crude oil and petroleum products.

AddThis Social Bookmark Button

Oil spill from sunken ship-2 vessels keeping vigil  

Mr K. Raghuramaiah, Chairman of Paradip Port Trust (PPT), on Tuesday
refuted the report that the sunken ship, "Black Rose", was spilling
huge quantities of furnace oil posing threat to the marine life in the
Bay of Bengal in and around Paradip. Large-scale spillage from the
ship was not possible for two reasons, Mr Raghuramaiah told Business
Line over phone from Paradip. First, the bulk of the furnace oil of
the sunken ship, about 900 tonnes, was contained in three sealed
chambers ("fully secure double bottom tanks") which, the inspection
revealed, were intact and, therefore, with little chance of oil
leaking from there.
Next, the furnace oil stored in the chambers was in semi-solid
condition and would become liquid only after heating and, therefore,
the oozing of semi-solid oil from the sealed chambers was remote.The
PPT Chairman, however, did not rule out some spillage of furnace oil
and lube oil from the engine room in "negligible" quantity, but, as of
now, there was no sign of that oil surfacing and thus causing
problem."We have posted two vessels, one PPT's own and the other
belonging to the Coast Guard, in the area to keep 24-hour vigil on the
probable oil spill," he said pointing out that the vessels were
carrying necessary equipment, including "boomers" to tackle spill, if
"If there was some spillage, the port authorities could not help it,"
he said, adding, "after all, it was an accident over which we had no
control."Meanwhile, PPT, the Chairman indicated, was contemplating
legal action against the owner of the vessel. There was no insurance
cover for the ship which, though flying Mongolian flag, belonged to
the Singapore-based Black Rose Maritime Ltd. However, the owner was
yet to be traced. "Despite our best effort, we've not yet been able to
locate him," he said. Locating the owner is important due to several
reasons, the most important being to force him to bear the cost of
removing the oil stored in the ship's tanks and the cost of salvaging
the ship wreck.
Ministry help sought ::: "After all, the port authorities cannot bear
these costs running into crores of rupees," he said indicating that
the Shipping Ministry's help in this regard had been sought. "However,
our first priority is to monitor and check oil spill, if any," he
said, adding, "salvage of the wreck can wait, more so when the wreck
is not obstructing the navigable channel."

by..Santanu Sanyal from the apges of THE HINDU BUSINESSLINE NEWSPAPER.

AddThis Social Bookmark Button

India's crude oil imports declined second month in a row in July  

India's crude oil imports declined second month in a row in July by about 3, 48,000 barrels per day (bpd) or 13% compared with the previous month. July's crude imports were 4, 33,000 bpd lower against the same month last year.

India's crude oil imports during the first seven months of 2009 averaged 2.58 mbpd, almost steady compared with the same period last year, according to OPEC's monthly report released on September 15 for the month. India's net oil imports in July averaged 2.29 mbpd, displaying a decline of 9% or 217,000 bpd compared with the previous month and 5% compared with the same month last year. Net crude oil imports were lower by 348,000 bpd, while net product imports were up by 1, 31,000 bpd. India's net oil imports for the first seven months of 2009 averaged about 2.35 mbpd, an increase of 3% or 57,000 bpd over the same period in 2008, the report noted.

On the export side, India's total product exports of 368,000 bpd in July were 78,000 bpd or 18% lower compared with the previous month and 53% lower as against a year earlier. Fuel oil exports in July averaged 71,000 bpd, up slightly from 69,000 bpd the previous month, but down from 1, 38,000 bpd a year ago. The report, however, said India's product imports increased in July by 53,000bpd or 22% compared with the previous month to an average of about 0.29 mbpd, a decline of 23% from the same month last year. India resumed its gas oil imports in July, importing about 67, 000 bpd compared with zero imports in the previous month and only 10,000 bpd in the same month last year. Gasoline imports were 26,000 bpd in July compared with 7,000 bpd in May and 16,000 bpd in July a year earlier. LPG imports in July average about 29,000bpd, steady compared with the previous month, but down from 56,000 bpd a year ago. India imported an average of 36,000 bpd of naphtha
in July, down from 65,000 bpd the previous month and from 102,000 bpd in the same month last year.

Fuel oil imports in July averaged 22,000 bpd, steady compared to the previous month, but up from 15,000 bpd a year earlier.

Kerosene imports were about 36,000 bpd compared to 20,000 bpd in the previous month and 66,000 bpd a year ago. For the first seven months of 2009, India imported an average of 0.32 mbpd of products, indicating about 138,000 bpd or a 30% decline compared to the same period last year. According to the report, fuel oil exports in July averaged 71,000 bpd, up slightly from 69,000 bpd the previous month, but down from 1,38,000 bpd a year ago. Jet fuel exports were 38,000 bpd in July, down from 68,000bpd in the previous month. Gas oil exports in July averaged 70,000 bpd, a decline of 42% from the previous month and 76% lower than a year earlier.

Gasoline exports increased to average 74,000 bpd, about 24% higher than in the previous month, but 40% lower compared to a year earlier. Naphtha exports were at 1, 07,000 bpd in July compared with 134,000 bpd in the previous month and2, 34,000 bpd a year earlier. For the first seven months of 2009, India exported an average of 0.56 mbpd of products, down by 2, 13,000 bpd or 28% compared to the same period the year before.

By Sanjay Jog, Mumbai, Financial Express, New Delhi, 17 September 2009

AddThis Social Bookmark Button

How much share of the losses on auto fuels will be borne by oil marketing companies?  

How much share of the losses on auto fuels will be borne by oil marketing companies is uncertain.

The government has clarified that it will bear the entire losses on cooking oil that are incurred by oil marketing companies (OMCs) because they sell LPG and kerosene at less than the cost of production. It has also said that the losses from auto fuels such as petrol and kerosene, being retailed at prices that are below the cost of production, will be shared between the upstream oil companies, namely ONGC and GAIL, and the OMCs.

The announcements indicate that pricing of fuels is unlikely to be freed in the near term, something the market has been looking forward to, at least in some small measure. How exactly the subsidies will be shared isn't known yet, but there are those who believe that given the fiscal pressures, the government may not want to shoulder too much burden.

Also, with the price of crude oil expected to rise, the losses on auto fuels could go up and unless the upstream companies pick up the tab, the OMCs will be hit. Should the crude oil prices remain between $55-70 per barrel, the subsidies should not be too large. The Street, however, has been hoping that the government will be generous with the OMCs, which is why the stocks of these companies have had a good run in the past couple of weeks. Stocks such as HPCL and BPCL had gained as much as 17-18 per cent in around 10 days since the end of August, though they have corrected slightly over the past week.

Should the government pick up most of the subsidy bill and compensate the OMCs through oil bonds, the earnings of these firms will get a boost.

Assuming that they share around 20 per cent of the subsidy on auto fuels, HPCL, at Rs 404, trades at 6.1 times estimated 2009-10 earnings, while at Rs 570, BPCL trades at eight times. At Rs 646, IndianOil trades at 6.8 times estimated 2009-10 earnings. While the valuations do not seem too high, there is a chance that the OMCs may have to pick up a bigger share of the losses.

Oil retailers: Living in hope
By Shobhana Subramanian, Business Standard, Mumbai, New Delhi, 16 September 2009

AddThis Social Bookmark Button

NTPC and RIL updates  

New Delhi, Sept. 16 Reliance Industries Ltd (RIL) has said that NTPC
should be cautious before making any comments on the ongoing case
between the two companies. In a letter to the Power Secretary, Mr H.
S. Brahma, RIL, said that a recent statement by NTPC referred to an
ongoing case between NTPC and RIL before the Bombay High Court on the
issue whether a binding contract between the two ever came into being.
"The statement, however, purports to state that a contract came into
existence , even before the Court has heard the arguments and
pronounced its judgement," the letter said.

It added that "in our view, NTPC, a PSU, should have taken care not to
make comments on a matter that is sub-judice lest these be construed
as an attempt to influence the course of justice."It referred to
NTPC's statement that the supply of gas at a price of $ 2.34/mBtu
which was bid by RIL in 2004, as compared with the price of $4.2/mBtu
which was approved by the Government in 2007, would result in benefit
to the consumers. RIL said NTPC's assertion was a "mathematical
conjecture and a hypothetical conjecture." RIL said that the price of
$2.34/mBtu will be relevant only after the final outcome of the legal
dispute between NTPC and RIL and after approval by the Government,
whereas the price of $4.2/mBtu had been approved by the Government.
While the gas price of $2.34/mBtu was bid for the proposed expansion
projects at Kawas and Gandhar, which do not exist today, the gas price
of $ 4.2/mBtu is applicable for the gas allocated by the Government to
the existing plants of NTPC, including Kawas and Gandhar.

Relevant comparison:::::"Therefore, what is relevant to compare is the
difference in price of gas for the existing plants of NTPC — the KG D6
gas price of $ 4.2/mBtu versus the price of alternate gas for these
existing plants," the letter said.Pointing out to the high cost of
power from NTPC's existing plants, RIL said that the average cost of
power sold to the State electricity boards in 2008-09 from NTPC's
Kawas and Gandhar plants was Rs 6.34/unit and Rs 4.64/unit,
respectively. This implies that the average cost of fuel purchased by
NTPC for these plants was $16/mBtu and $11/mBtu, respectively. With
these figures, it is obvious that if NTPC buys D6 gas at the approved
price of $4.2/mBtu, the cost of generating power would be just Rs
With the commencement of gas supply from D6, the variable cost of
power from other plants would fall to below Rs 2/unit, while that from
Kawas and Gandhar will continue to be high. "With such high cost
operations , it is also not surprising that NTPC has not succeeded in
any of the tariff-based competitive bidding for the development of the
Ultra Mega Power Projects," the letter said.


AddThis Social Bookmark Button


AddThis Social Bookmark Button

16th September 2009 International Ozone DAY  

16th September 2009 International Ozone DAY

On 19 December 1994, the United Nations General Assembly proclaimed 16 September the International Day for the Preservation of the Ozone Layer, commemorating the date, in 1987, on which the Montreal Protocol on Substances that Deplete the Ozone Layer was signed.

States are invited to devote the Day each year to promote, at the national level, activities in accordance with the objectives of the Montreal Protocol and its amendments.

The links on the right hand column goes to previous year's celebrations which provides information and materials that can be used to celebrate "Ozone Day" in your country, organisation or school

for more details GO TO -

AddThis Social Bookmark Button