On Friday, Indian Oil Corporation (IOC) made a statement saying that the company is ready to supply the new BS VI, low emission fuels from the 1st of April and there will be a marginal increase in the price of the fuels.
IOC is India’s largest oil suppliers and has spent over Rs. 17,000 crore in upgradations of its refineries to make it ready for production of low sulphur petrol and diesel says Sanjiv Singh, Chairman, IOC.
Even though he did not disclose the amount by which the prices of fuels will increase, Singh said that “there will definitely be a marginal increase in retail prices of the fuels from April 1 when the whole country will be run on new fuels, which will have sulphur content of only 10 Parts Per Million (PPM) as against the present 50 PPM” in BS IV fuels.
Singh assured that “we will not be burdening the consumers with a steep hike,”.
He had said that the government run Oil Marketing Companies (OMCs) have invested Rs. 35,000 crore to upgrade the refineries, out of which Rs. 17,000 has been spend by IOC alone.
Earlier in the week, BPCL (Bharat Petroleum Corporation Limited) said that the company has invested nearly Rs. 7,000 for the upgradations, however, HPCL (Hindustan Petroleum Corporation Limited) run by ONGC (Oil and Natural Gas Corporation) Limited has not disclosed the amount it has spent to upgrade their refineries.
However, HPCL had said that it was ready with the BS VI fuels since 26/ 27 February and would sell only the latest grade fuels on its fuel stations from 1st March.
About 15 days ago, IOC, too, had switched its production to BS VI fuels and a majority of the containers and fuel depots are ready to deliver BS VI, Singh said. He added that there are some remote areas where the consumption of fuel is low where it will take some time to switch.
It has been reported that companies can increase fuel prices between Rs. 0.70 and Rs. 1.20 per liter but Singh said that it is very difficult to bring out an average of fuel price increase given the complexities of every refinery. But he claimed that the price hike will not become a burden for the consumers.
Singh said that they are making the investment from a point of Return On Investment (ROI) but as a national mandate. However, Singh added that all the countries that have made the switched to low sulphur fuels are in fact charging higher prices, and as we, too, will start to offer BS VI fuels at our fuel station, our prices will be benchmarked against EURO VI prices as against the currently used cost-plus model.