Castrol readying for biofuel engines

These will be launched when the automobile sector rolls out vehicles that would run exclusively on biofuels, according to Naveen Kshatriya, managing director, Castrol India Limited.

Kshatriya, who was here to launch the 100th branch of Castrol Bikezone in Hyderabad, told Business Standard, "There is no consistency in the percentage of biofuel used for blending now. Once the blending is standardised, we will be in a position to tell what formulation would suit a particular engine-making technology," he said.

Lubricants will not undergo any composition change. "Unlike fuels, lubricants cannot be used together with biofuels," he said. Globally, Castrol spends about $70 million a year on research and development including about Rs 10 crore in India for country-specific projects. Last year, it spent Rs 6.7 crore on R&D in the country.

However, the rising crude oil prices are shrinking the margins in the lubricants market. The per tonne price of base oil, one of the components in the crude oil and the main ingredient for making lubricants, has gone up four times from $250 a tonne in 2002 to $1,000 a tonne in 2007.

However, the price rise has been sharp in the recent months and at present a tonne base oil is priced between $1,100 and $1,200.

"We absorbed a part of the rise but had to pass some of it to the consumers," he said. The company had recently revised the prices upwards by about three per cent, he informed.

The company plans to launch another 100 Bikezones in the country this year. "With six million two-wheelers being added every year, there is always going to be a need for servicing," he said, adding that bikers were insisting on power, performance and fuel efficiency.