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.