Oil refiners need to invest Rs 15,000 cr to meet BS IV norms

Oil majors have to invest around Rs 15,000 crore in their refineries to produce fuel compliant with BS IV emission norms, as around 50 cities in India would come under these norms by 2015.

Speaking on the sidelines of the Asia Pacific Automotive Conference (APAC-16), oganised by SaeIndia, R K Malhotra, director (R&D), Indian Oil Corporation, said the oil companies had spent nearly Rs 30,000 crore in the last few years on their refineries to manufacture BS IV compliant fuel instead of BS III.

Another Rs 10,000-15,000 crore investment was needed to achieve the government’s directive of covering 50 cities by 2015. Currently, 16 cities are covered under these latest emission norms, he said.

"Moving to Bharat Stage IV alone will not reduce pollution. Complete benefits of BS IV emission norms will be realised only if the old vehicles are phased out," said Malhotra.

“Only a small part of total particulate emission (sulphur) will come down. The major impact on old vehicles can be felt only if they retrofit engines and after-treatment devices,” said Malhotra.

Pawan Goenka, chairman (steering committee), APAC, and President (automotive & farm equipment), Mahindra and Mahindra, said, “Retrofits are not always possible as it involves significant recalibration and the costs are not insignificant.”

The challenge is in phasing out the older vehicles, which requires huge government support, as it involves the cost of disposing vehicles, said Goenka.

In several countries, vehicle owners are being given incentives to replace old vehicles. “Several governments have written a significant cheque towards this,” added R Seshsayee, executive vice-chairman of Ashok Leyland.

He said that apart from BS IV norms, the government should accelerate adoption of CNG by building the required pipeline infrastructure across the country.  

Currently, Delhi, Mumbai and Surat have embraced this alternative fuel. The industry is keenly awaiting the Krishna-Godavari discovery so that Hyderabad and the surrounding areas, including Tamil Nadu possibly, can benefit.