Raw crude oil, which is stored in a tank farm, is passed through a desalter to eliminate salt as an impurity. The oil is then poured into a crude distillation unit or CDU, which is a fractionating column. The CDU distils the incoming crude oil into various fractions of different boiling ranges, each of which is then processed further in the other refinery processing units.
The fractions collected at the top of the column have a lower boiling point and are known as light distillates - liquefied petroleum gas or LPG, petrol and naphtha. This is followed by middle distillates like kerosene, aviation turbine fuel or ATF and diesel collected in the middle; and then heavy distillates like fuel oil, lubricating oil, wax and asphalt collected at the bottom of the column.
The crude oil molecules also contain atoms of sulphur and nitrogen, which must be separated from the end products to increase efficiency of engines and cut down pollution levels (both suphur and nitrogen form harmful sulphur dioxide and nitrogen oxide molecules in contact with oxygen).
Therefore, both technical reasons and environment protection demand a very low sulphur content in products. Oil refineries have hydro-desulphurisation (HDS) units in sulphur (S) recovery blocks. Here, sulphur is combined with hydrogen molecules and removed from the product stream as hydrogen sulphide gas. This gas is transformed to elementary sulphur and sold to the chemical industry. The volume of sulphur removed has to go up if the polluting elements in the refined petroleum products have to be reduced.
BS-IV norms are currently followed across 63 Indian cities for petrol and diesel. The BS-IV compliant fuels have sulphur concentration of 50 parts per million (ppm). This will come down to as low as 10 ppm in BS-VI compliant fuels and auto engines. This means a lower level of harmful emissions and reduced incidence of lung diseases. Remember, most Indian cities still use BS-III standards where sulphur content stands at 350 ppm for diesel and 150 ppm for petrol.
While the government is yet to announce the new BS-VI norms, the oil marketing companies (OMCs) are currently busy finalising multiple projects at an investment of Rs 28,000 crore to enable this reduction in concentration of sulphur (and other harmful contents like nitrogen). This includes ramping up capacity of sulphur recovery blocks and HDS units. The HDS unit is a key component of a refinery as its efficiency determines sulphur concentration and thus, fuel efficiency.
Indian Oil Corp (IOC), the nation's largest fuel retailer, says the process will also involve changing the crude oil mix of refineries (lighter "sweet" crude varieties are low in sulphur but are costlier than heavy crude oil), capacity optimisation and even modifying the product streams of refineries.
IOC alone plans to spend Rs 13,000 crore on such projects to set up more hydro-processing units, replacing traditional catalysts (chemicals that aid sulphur binding with hydrogen) employed in HDS units with improved, more efficient catalysts. These OMCs are working out the framework of these projects in consultation with consultants. All these projects will be commissioned across refineries in four years.
The switch to BS-VI norms will also reduce concentration of carbon monoxide, unburnt hydrocarbons, nitrous oxide and particulate matter from emissions. Finally, the quality upgrade will also result in diesel's cost of production going up by 63 paise per litre and petrol by Rs 1.40 per litre, according to IOC. For consumers, this translates into higher retail prices of petrol and diesel. The switch will also make petrol vehicles costly by Rs 50,000 and diesel vehicles by Rs 1 lakh.