IOC to market bio-lubricant next year

Indian Oil Corporation (IOC), the nation’s biggest oil marketer and refiner, will launch its first biodegradable lubricant next year. The company is conducting trial runs on the lubricant and would soon evolve a marketing and branding strategy for the product.

The product would be marketed as a separate brand. “Lab tests for the product are over. We are doing extensive engine trails at present. In the next one year, the product should hit the market under a suitable brand name,” said a senior executive from IOC. The research on the product had begun two years earlier.

A biodegradable lubricant can be vegetable oil-based or based on synthetic esters manufactured from modified renewal oils, from mineral oil-based products. Most liquid lubricants used at present all over the world are petroleum-based mineral oils. "Use of biodegradable lubricants which are mainly derived from genetically modified vegetable oils, would be used in agricultural and forest machinery, and the transport sector," said a Mumbai-based analyst.

There are 44 lubricant companies in the market including Total, Gulf, Shell and Vedol, besides brands from the three government-controlled oil companies — IOC, Bharat Petroleum Corporation and Hindustan Petroleum Corporation — which together hold over 50 per cent share. IOC, however, is the dominant company in the country's lubricant market, with its Servo brand of lubricants. The Servo range includes over 500 lubricants and 1,200 formulations.

The total lubricant market in India is 1.6 billion litres, of which automotive use is about 950 million litres. Castrol India, the other dominant player, claims to have 27 per cent of the market. While analysts say Castrol cannot match public sector units in coverage due to their 30,000-strong petrol station network, it has strong distribution presence through workshops and spare parts suppliers—over 70,000 outlets, which compares well with the 40,000-plus for IOC’s Servo.

IOC is also conducting research in areas like oil refining technology and producing diesel from algae. The company will shortly commission a project at its Faridabad centre, where it will install technology for coal gassification and production of ethanol from biomass. The company is also in talks with international energy institutes to tie up for research and development.