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Automotive Fuel Supply Policy

Indo-Japanese Conference on Vehicular Emission Delhi

P D BahukhandiGeneral Manager(QC)

Indian Oil Corporation Ltd.

18.03.2009

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Automotive Fuel Supply Policy•Fuel Supply journey in India•Driving Force for auto fuel supply policy•India Hydrocarbon Vision 2025•Auto Fuel Supply Policy guidelines•Control Orders & Gazette Notification•Security of auto fuel supply•Indian Refinery & Pipeline network, ongoing plans and future potential

•Principle in auto fuel distribution•Auto fuel quality road map•Biodiesel purchase policy•Challenges, constraints and initiatives•Recap

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News Item

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• 1930 – Few traders with multi nationals in the market • 1938-40 – Colonial govt in Operation by a committee in

London coordinated through Burma Shell in India• 1948- Industrial Policy Resolution states that Oil Industry

should be state owned and operated unless specified• 1953 – Nahorkatiya Oil field discovery• 1954-57 – Refineries by Burma Shell and Caltex• 1958- GOI forms its own company, Indian Refineries Ltd.• 1959 - Indian Oil Co.is founded, statutory body to supply oil• 1964 - Indian Oil Corporation is formed by merger of above

two • 1961– Price war with foreign companies• 1962– War with China .

Fuel Supply Journey in India

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•1965 & 1971 – War with Pakistan

•1960-65 Damle Committee – Talukdar Committee - Shantilal Shah Committee – Pricing on Import Parity, Refineries as Pricing Point with formula

• 1973 - Oil Pricing Committee of S Krishnaswamy – APM with effect from 1977, amended 1986 with formation of OCC

•1970 – New Oil fields were found to manage pool account

• 1976 - Burma Shell and Caltex Refineries are nationalised

• 1981 – Assam Oil Co. nationalised

• 1996 - Standard Planning Group on Deregulation

• 1997 - Notification of Deregulation of APM by 2002

• 2002 - Indian Petroleum industry is de-regularised with subsidees

Fuel Supply Journey in India

6

Deregulation Road Map in IndiaDeregulation Road Map in India

1991 (Industrial Lubes)

1993 (Automotive Lubes)

1998 (FO, LDO, Naphtha)

2001 (ATF)

2002 (LPG, MS, HSD & SKO)

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Driving Force Auto Fuel Supply Policy

• National Energy Security

• National Energy Sources & Reserves

• Role of Oil & Gas on Economy

• National Petroleum Reserves & Utilization

• Domestic fuel demand and infrastructure

• Strategic Fuel Reserve and Emergency

• Environment and Eco Protection

• Price, Diversification & Conservation

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Share of energy supply in India (%)Trend and projection

Year Coal Oil Gas HydelNuclear

1997-98 55 35 7 2 1

2001-02 50 32 15 2 1

2006-07 50 32 15 2 1

2010-11 53 30 14 2 1

2024-25 50 25 20 2 3

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NPC EXTRACTS – Coal, Oil & NG will remain Indispensable

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Vision 2025 for Fuel Supply Policy

• 1997 – Resolution no.224 on decision of dismantling of APM

• 1999 – Working Group on Indian Hydrocarbon vision 2025

• 2000 – Report on Indian Hydrocarbon vision 2025 submitted, Marketing rights on investment Rs2000 crores in Oil industry, Open distribution network without encroachment

• 2002 – Resolution by MOP&NG to grant authorisationto market MS/HSD and ATF

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Indian Hydrocarbon Vision 2025• To assure energy security by achieving self-reliance through increased

indigenous production and investment in equity oil abroad.

• To enhance the quality of life by progressively improving product standards to ensure a cleaner and greener India.

• To develop Hydrocarbon sector as a globally competitive industry which could be benchmarked against the best in the world through technology upgradation and capacity building in all facets of the industry.

• To have a free market and promote healthy competition among players and improve the customer service.

• To ensure oil security for the country keeping in view strategic and defence considerations.

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Exploration and Production SectorWith Medium & Long Term Objectives

• External policy & Oil Security

• Natural Gas

• Refining & Marketing

• Tariff and Pricing

• Restructuring and Disinvestment

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Strategy

•Long term global strategy- Information and archival database - Organisation and functioning of Oil

markets- Promote R&D, transfer technology,

training- Protect interest through joint

commission, working group- Transnational oil & gas pipelines

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Guide Lines-Fuel Supply PolicyGuidelines for Management of Oil & Gas Resources

Guidelines for laying Petroleum product pipelines

Guidelines for Retail Outlet dealership

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Control Order & Gazette Notification - Fuel Supply Policy

•Aviation Turbine Fuel (Regulation of Marketing) Order •Kerosene•Lubricating Oil & Greases•Motor Spirits and High Speed Diesels•Naphtha •Petroleum Products•Solvents, Raffinate and Slop•Liquid Petroleum Gas•Marketing Regulation•Constitution of search Committee – Office Order•Guideline for laying Petroleum pipeline

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Energy Security

5 MMT strategic storage at 3 locations managed through Strategic Petroleum Reserve Ltd. owned by OIDB by 2012

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IOC Refineries (7)Subsidiary of IOC (3)Other Refineries (8)Likely to come up (3)

DigboiNRL

Guwahati

BRPL

HaldiaBarauni

Mathura

Panipat

Koyali

HPCBPC

MRPL

KRL

CPCL

HPC

CBR

RIL

Bhatinda(HPC)

Bina(BPC)

Paradip(IOC)

EOL

Indian Refineries

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Proposed / Ongoing Refineries Capacity

Refinery Antd. Year of Commn. Capacity

RIL New Refinery 2009 30000IOC Paradeep 2010 15000BPC Bina 2010 6000HPC Bhatinda 2009 9000NOCL Cuddalore 2009 6000

66000IOC TOTAL

[Figs in TMTPA]

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Mumbai

Panipat

Guwahati

Koyali

Haldia

Mathura

BarauniKanpur

Bhatinda

Kandla

Vadinar

Chaksu

Ahmedabad

Jalandhar

Jodhpur

BudgeBudge

Kot

Delhi

BongaigaonSiliguri

Meerut

Sidhpur

Digboi

Tinsukia

Chennai

Navagam

Tundla Lucknow

Bangalore

Indore

Sanganer

Pune

Maurigram

Rajbandh

NajibabadRoorkee

Ambala

Sangrur

Rewari

Ajmer

Chittaurgarh

Dahej

Sankari Asanur

Trichy

Madurai

Paradip

Mundra

Product (6138 Km)Crude Oil (2887 Km)

IOC’s Pipelines (Existing)

Product (546 km)Crude Oil (330 Km)

IOC’s Pipelines (On-going)

Pipeline Network: Indian Oil

Ratlam

LPG (275 Km)R-LNG (132 Km)

Dadri

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MumbaiVizag

Panipat

Guwahati

Koyali

Nahorkatiya

Haldia

Mathura

Manmad

Vijayawada

Kochi

BarauniKanpur

Bhatinda

Kandla

Vadinar

Chaksu

Ahmedabad

Jalandhar

Jodhpur

BudgeBudge

Kot

Delhi

BongaigaonSiliguri

Meerut

Sidhpur

Digboi

Tinsukia

Karur

Chennai

MumbaiHigh

Uran

Ankleshwar

Navagam

Tundla Lucknow

Mangalore

Bangalore

Secunderabad

Indore

Sanganer

Pune

Maurigram

Rajbandh

NajibabadRoorkee

Ambala

Sangrur

Rewari

Ajmer

Coimbatore

Sankari Asanur

Trichy

Madurai

Mundra

ProductCrude Oil

ProductCrude Oil

Other Companies’ Pipelines

IOC’s Pipelines (Existing)

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BPur

Hazira

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Existing IOC Pipelines

GSPL Betkuchi, Hashimara, Siliguri M/K/H/N/L 1.20

HMRPL Mourigram, Budge-Budge, Rajbandh

M/K/H/A/N 1.35

HBPL Rajbandh, Barauni K/H/N 1.25KBPL (P-B) Sangrur, Bhatinda M/K/H 1.5

BKPL Patna, MGS, Allahbad, Kanpur, Amousi

M/K/H/N/L 1.8

KAPL Ahmedabad M/K/H/A 1.1MTPL Tundla ( Agra) M/H/K 1.1KNPL Navgam(Ahemdabad) M/H/K 1.8

MJPL Bijwasan, Partapur,Ambala, Jalandhar, Najibabad, Roorkee

M/K/H/A 5.1

PRPL Rewari M/K/H 1.5CTMPL Trichy, Madurai, Shankari M/K/H 1.8

Capacity MMT/A

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Existing Others Pipelines

MPPL Mumbai-Vashi- Pune (Loni) - Sholapur

M/K/H HPC 3.67

VVPLVizag-Rajmundry-Vijaywada-

Suryapet-Ghatkesar M/K/H HPC 4.1

PVKPL Vadinar - Kandla M/K/H Petronet 6.0

PCCKPLCochin-Coimbatore (Irugur)-

Karur M/K/H Petronet 3.3

PMHBPLMangalore-Hassan-

Bangalore M/K/H Petronet 2.3

Capacity MMT/A

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Existing IOC Pipelines

2003-04 2004-05 2005-06 2006-07GSPL 1964 1.200 1.200 1.274 1.260 1.230KAPL 1966 1.100 0.982 0.680 0.520 0.540KNPL 2003 1.800 0.247 0.236 0.23 0.07BKPL 1966 3.500 2.201 2.302 4.18 4.05HBPL 1967 1.250 1.141 0.920 0.870 0.960HMRPL 1974 1.350 1.871 1.902 1.76 1.9MJPL 1982 3.700 4.575 4.078 4.630 4.990MTPL 2003 1.200 0.231 0.270 0.250 0.250PBPL 1996 1.500 4.679 2.822 2.51 1.29KVSSPL 2003 4.100 0.424 1.727 2.06 3.01CTMPL 2005 1.730 - - 0.13 0.82KDPL 2006 0.660 0.18DTPL 1956 1.000 0.506 0.492 0.520 0.470

24.090 18.057 16.703 18.920 19.760

UNIT PRESENT CAPACITY

YEAR OF COMMN.

ACTUALS

TOTAL

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Future Ahead (List of locations receiving bulk input by Rail having Pipeline

connectivity potentialLocation State Avg Thruput per

annum (TMT)Equivalent Rail TWs

per day

Akola/Gaigaon Maharashtra 192.0 26Ambabai/Karari M.P. 121.2 17Aonla U.P. 237.6 33Baitalpur U.P. 364.8 50Banthra U.P. 205.2 28Bharatpur U.P. 178.8 24Bijapur Karnataka 123.6 17Bhitoni (Jabalpur) M.P. 205.2 28Chakkibank (Pathankot) Punjab 120.0 16Cudappah A.P. 284.4 39Desur Karnataka 80.4 11Feroke Kerala 198.0 27Gonda U.P. 194.4 27Gulberga Karnataka 103.2 14Guntakkal A.P. 261.6 36Rairu (Gwalior) M.P. 172.8 24Itarsi/Dehri Maharashtra 99.6 14Jammu J&K 376.8 52Jatni Orissa 316.8 43Khapri (Nagpur) Maharashtra 200.4 27Miraj Maharashtra 238.8 33Mysore Karnataka 170.4 23Namkum Bihar 198.0 27Navalur Karnataka 133.2 18Malda W.B. 198.0 27Nishatpura (Bhopal) M.P. 139.2 19Ongole A.P. 258.0 35Pakni Maharashtra 201.6 28Raxaul Bihar 240.0 33Rourkella Orissa 87.6 12Somnathpur Orissa 139.2 19

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Gas through Transnational Pipe - Fuel Supply Policy

• Iran-Pakistan-India (IPI )Pipeline Project• Myanmar-Bangladesh-India Gas Pipeline Project• Turkmenistan-Afghanistan-Pakistan(TAP) Pipeline Project• LNG import to India under open general license

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020406080

100120140160

MM

TPA

'80-81

'90-91

'00-01

'02-03

'03-04

'04-05

'05-06

'06-07

'07-08

Production Consumption

Supply-Demand in India

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Guiding Principle In DistributionGuiding Principle In Distribution

Product Positioning Cost =

Refn Optg Cost (or Refinery Transfer Price)

For own refineries – refinery operating cost

For purchase from others’ refineries – RTP

Prior to deregulation, no effect on positioning cost as refinery margins protected

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Guiding Principle In DistributionGuiding Principle In Distribution

Product Positioning Cost =

Refn Optg Cost (or Refinery Transfer Price)+

Freight

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Guiding Principle In DistributionGuiding Principle In Distribution

Product Positioning Cost =

Refn Optg Cost (or Refinery Transfer Price)+

Freight +

Charges for assistance from other cos.

No effect, as all mktg cos. under OCC, no cost charged to each other

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Guiding Principle In DistributionGuiding Principle In Distribution

Product Positioning Cost =

Refn Optg Cost (or Refinery Transfer Price)+

Freight +

Charges for assistance from other cos. +

Irrecoverable Taxes +

Excise Duty

All under-recoveries on taxes & duties recovered through Oil Pool mechanism

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So..

It is

“Least Transportation Cost” only

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Now Deregulation Now Deregulation ––What it meant for Distribution ?What it meant for Distribution ?

No reimbursement for logistics under-recoveries

RTP of refineries based on Import Parity Price (for Port refineries) and inland differential (for inland refinery)

All taxes and duties payable by the company

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Crude Purchase Storage &Distribution

Retailing Distribution Storage

Manufacturing

Earlier Supply Chain in Indian OilEarlier Supply Chain in Indian Oil

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Earlier SCM approach in Indian Oil

Sales & Distribution(Demand)

Manufacturing(Capacity)

Procurement(Material)

International trade

purchases crude that gives best

refinery margins without

considering demand or production

plans

CUSTOMER

Maximize Margin Maximize marginand throughputs

Maximize salesMinimize logistics

Marketing generates demand

numbers and allocates to refineries.Purchase

/Exchanges only for

bridging the gap

Refineries make

production plans

without considering

logistic costs

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DemandForecast ?

DistributionPlanning ?

What & where to Store and from where ?

Revised Supply ChainRevised Supply Chain

What & WhereTo Make ?

What and Howto Feed ?

Crude evaluation& Procurement ?

CorporateCorporate

37Refinery Scheduling

Supply Chain Road Map

Supply + Distribution

Multi-Site, Multi PeriodPlanning Model

CorporateOffice

Crude

Purchase

Corporate International Trade

PipelineSchedul

ing

MktgOffice

DemandForecasting

CorporateOffice

DistributionScheduling

MktgOffice

R1 R7R2

RefinerySites

RefinerySites

RefinerySites

DistributionPlanning

CorporateOffice

Refinery Planning

38Refinery Scheduling

IOCL Supply Chain Road Map

Supply + Distribution

Multi-Site, Multi PeriodPlanning Model

CorporateHO

Crude

Purchase

IOCLInternational

Trade

PipelineSchedul

ing

MktgHO

DemandForecasting

CorporateHO

DistributionScheduling

Mktg HO

R1 R7R2

RefinerySites

RefinerySites

RefinerySites

DistributionPlanning

CorporateHO

Refinery Planning

Planning Solutions

Pipeline Scheduling

Transportation Scheduling

(Rail/Road)

Refinery Scheduling

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The Enablers

Infrastructure improvement initiatives by the Government of India

e.g. Golden Quadrilateral, North-South & East-West corridors

Qualitative improvement in Industrial environment in India

Increased application of Information Technology

Data Warehousing & Management

Dedicated Railways Freight Corridors

Railway freight corridor

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The Challenges

Cost Effective Just in Time Supply-Chain

Integrating Supply with Demand

Improved Forecasting

Time compression in the supply chain –reducing the lead time

Complete alignment of Supply Chain Strategy with Overall Business Startegy

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The Constraints

Demand Fluctuations

Availability constraints from refineries

Movement Constraints:

TW movement

PPL movement

Tanker movement

Road movements

Facility Constraints:

Tankage considering multiplicity of products

Loading/Unloading

G d l t d C t i t

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Projects Approved in 2007-08-IOCL

Project Value (Rs/Crores)

MS Quality Improvement Project -Mathura Refinery (Phase-II).

63.00

MSQ Upgradation Project at Panipat Refinery (Additional fund)

680.00

EURO-III MS Quality Improvement Projects at Barauni, Guwahati & Digboi Refineries

600.00

Chennai-Bangalore Product Pipeline 232.11Installation of one 60 TPD capacity Sulphur Recovery Unit (SRU) at Mathura Refinery.

122.60

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Projects Approved in 2007-08,IOCL

Project Value (Rs/Crores)

Construction of 600 TMTPA LPG Import facility at Cochin

170.00

Revised Implementation Strategy & Revised cost for Panipat Refinery Additional Expansion Project (PRAEP).

1007.83

Setting up of facilities for production of Para-Xylene at Gujarat Refinery: –1 Detailed Feasibility Report : 2 New NHT-ISOM Complex under Residue Upgradation & MS/HSD quality improvement Project. :

9.30

189.00

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KEY CHALLENGES

Adhering to Standard Operating Practices

Ensuring zero time and cost over runs in projects

Quality and Quantity Assurance to Customers

Non-Compromising Safety Practices – Round the clock, Round the year

Adhering to Vigilance guidelines without impacting business.

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Supply/Demand-Petroleum Products (in MMT)

YearDemand

(without meetinggas deficit)

Demand (withmeeting gas

deficit)

Estimatedrefiningcapacity

Estimatedcrude

requirement

1998-1999 91 103 69 69

2001-2002 111 138 129 122

2006-2007 148 179* 167 173

2011-2012 195 195** 184 190

2024-2025 368 368 358 364

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SUPPLY/DEMAND-NATURAL GAS(in million standard cubic meters per day)

(MMSCMD)DEMAND

1999-2000 110

2001-2002 151

2006-2007 231

2011-2012 313

2024-2025 391

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INDUSTRY QUALITY CONTROL MANUAL FOR NON-AVIATION FUELS

IQCM IS AN AUTHENTIC DOCUMENT, APPROVED BY MOP&NG

IQCM IS A BIBLE OF QUALITY CONTROL FOR RECEIPT, STORAGE AND DELIVERY OPERATIONS AT DEPOT / TERMINALS

DETAILED GUIDELINES ON SAMPLING, SEALING, DESPATCH, RETENTION AND DISPOSAL OF SAMPLES ARE SPELT OUT CLEARLY

BIS SPECIFICATIONS OF VARIOUS PRODUCTS ARE ALSO GIVEN

A SEPARATE CHAPTER ON PRODUCT QUALITY FAILURE INVESTIGATION PROCEDURE IS ALSO PROVIDED

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MS/HSD CONTROL ORDERS

GAZETTE NOTIFICATIONS HAVE BEEN ISSUED BY MOP&NG AND OIL INDUSTRY IS SUPPOSED TO FOLLOW THEM

WHENEVER NEEDED, AMMENDMENTS ARE ISSUED FROM TIME TO TIME TO CONTROL ORDERS

MS & HSD CONTROL ORDER 2005 HAS BEEN ISSUED FOR REGULATION OF SUPPLY AND DISTRIBUTION AND PREVENTION OF MALPRACTICES

4921/10/2003 by MOP&NG

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Driving Force Automotive Fuel Quality Policy

•Awareness of effects of emission on environment

•Growth of automobiles higher than human population

• A look for cheaper and reliable mode of transport

•Holistic view of the diverse aspect –- emission

- auto technology

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New Generation Auto Fuels• Introduction of BS-III in 13 mega cities w.e.f. 01/04/2005 :

NCT/NCR Delhi, Mumbai, Kolkata, Chennai, Bangalore, Hyderabad, Ahmedabad, Surat, Pune, Sholapur, Kanpur, Agra & Lucknow.

• Introduction of BS-II in entire country (except above 13 cities) w.e.f. 01/04/2005

• Introduction of BS-IV in 13 mega cities w.e.f. 01/04/2010 :

NCT/NCR Delhi, Mumbai, Kolkata, Chennai, Bangalore, Hyderabad, Ahmedabad, Surat, Pune, Sholapur, Kanpur, Agra & Lucknow.

• Introduction of BS-III in entire country (except above 13 cities) w.e.f. 01/04/2010

• Use of CNG/LPG

• Accelerate alternative fuels

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STATUS AND IMPLEMENTATION PLAN OF EXTRA LOW SULPHUR HSD

(ELHSD) 0.25% SULPHUR AND ULTRA LOW SULPHUR HSD (ULHSD) i.e. 0.05% SULPHUR

Sr.No. Road Map Status 1. Normal HSD with 1% sulphur to be replaced by HSD with 0.5% sulphur in four

metros and Taj Trapezium by April, 1996. Implemented

2. HSD with 0.5% sulphur to be replaced by ELHSD with 0.25% sulphur in Taj Trapazium by September, 1996.

Implemented

3. HSD with 0.5% sulphur to be replaced by ELHSD with 0.25% sulphur in Delhi by October, 1997.

Implemented

4. HSD with 0.5% sulphur to be replaced by ELHSD with 0.25% sulphur in Calcutta, Chennai and Mumbai by April, 1998.

Implemented

5. Extra Low Sulphur HSD (0.25% Sulphur) is being implemented throughout the country w.e.f. 1.1.2000

Implemented

6. Ultra Low Sulphur HSD (0.05% Sulphur) presently being supplied to DTC owned vehicles w.e.f. October, 99

Implemented

7. ULSHSD (0.05% Sulphur) presently supplied in NCR w.e.f. 1.4.2000 (for non commercial vehicle only)

Implemented

8. ULHSD (0.05% Sulphur) being supplied in Mumbai w.e.f. October, 2000 Implemented 9. ULSHSD (0.05% Sulphur) shall be implemented in NCT w.e.f. 1.3.2001 (for all

types of vehicles) Implemented

10. ULSHSD (0.05%, Sulphur) shall be implemented in NCR w.e.f. 30.6.2001 Implemented 11. ULSHSD (0.05%, Sulphur) shall be implemented in Calcutta/Chennai w.e.f.

1.7.2001 Implemented

12. ULSHSD (0.05%, Sulphur) shall be implemented throughout the country. April 05

Implemented

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Changes in HSD Specifications of New Generation Fuel

S.N. Characteristics BS-II Requirements

BS-III Requirements

a Total contaminations (Particulate matter) max.

- 24 mg/kg

b Oxidation stability,max

- 25 g/m3

c Polycyclic Aromatic Hydrocarbons (PAH), max. - 11 % by mass

d Lubricity, corrected wsd 1.4 at 60°C, max.

- 460 microns

54

Changes in HSD Specifications of New Generation Fuel

S.N. Characteristics BS-II Requirements

BS-III Requirements

e Total Sulphur max. 500ppm 350ppm

f Cetane Number min. 48 51g KV cst @ 40°C 2.0 – 5.0 2.0 – 4.5

h Density @ 15 °C kg/m3

820 - 860 820 – 845

i Water content, max 500ppm 200ppm

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Changes in MS Specifications of New Generation Fuel

S.N. Characteristics BS-II Requirements

BS-III Requirements

1 Total Sulphur, max. 0.05 % mass 0.015 % mass

2 Distill. % by vol. Rec.

at 70°C.

at 100°C

at 150°C, min.

at 180°C, min.

F.B.P., °C, max.

10 - 45

40 - 70

-

90

215

10 - 45

40 - 70

75

-

2103 Lead content, max. 0.013 g/l 0.005 g/l

4 Density at 15°C,Kg/m3 710 - 770 720 – 775

56

Changes in MS Specifications ofNew Generation Fuel

S.N. Characteristics BS-II Requirements

BS-III Requirements

5 RON, min. 88 (93 for premium)

91 (95 for premium)

6 MON, min. - 81 (85 for premium)7 AKI, min. 84 (88 for

premium)84 (88 for premium)

8 RVP, max. 35 - 60 60 kPa9 Benzene content,

max.5.0/3.0/1.0% by vol.

1.0 % by vol.

10 Oxidn. Stability, min. - 360 minutes11 Olefin content, max. - 21 % by vol.

(18 for premium)12 Aromatic content,

max.42 % by vol.

(42 for premium)

57

Changes in MS Specifications of New Generation Fuel

S.N. Characteristics BS-II Requirements

BS-III Requirements

13 Oxygen content, max.

- 2.7 % by mass

14 Oxygenates content :

a) Methanol, max. 3 % vol 3 % vol.b) Ethanol, max. 5 % vol. 5 % vol.c) IPA, max. - 10 % vol.d) Iso-butyl alcohol,

max.- 10 % vol.

e) Ter.-butyl alcohol,max

7 % vol 7 % vol.

f) Ethers, max. 15 % vol. 15 % vol.

58

BS-III & BS-IV eqvlnt. NORMS, SQUEEZING THE LIMITS ON BENZENE IN MS

Benzene Content (max.) % volume

for Both Unleaded Regular & Unleaded Premium

BS-II BS-III BS-IV

3.0 1.0 1.0

59

BS-III & BS-IV eqvlnt. NORMS, SQUEEZING THE LIMITS ON SULPHUR IN MS

• SULPHUR TOTAL (MAX)

for Both Unleaded Regular & Unleaded Premium

BS-II BS-III BS-IV

0.05% MASS 150mg/Kg. 50mg/Kg.

60

BS-III & BS-IV NORMS, ONWAY TO INCREASE RON IN MS

• RON -MINIMUM REQUIREMENT

BS-II BS-III BS-IV

88 91 91

and93 95 95

61

MS Quality - Worldwide

Attibutes Unit India Euro III Japan Korea New Zealand China Taiwan South AfiricaRON min 91/95 91 / 95 89 / 96 91 / 94 91 / 95 90/93/95 92/95/98 95 / 97Sulphur ppm min 150/50 150 100 130 350/150 800 80/120/180 1000/1500Aromatics vol % max 42 42 - 30 or 35 48/42 40 ** -Olefins vol % max 21 / 18 21/18 - 23 or 18 20 or 25 35 ** -RVP KPA 35-60 60 & 70 44-78 70 - S, 96 -W 45 KPA min

( )88 (W) 59/59/61** 45-75

** Taiwan follows emission models to allow refiners to choose limits on olefins and aromatics.

Japan does not have olefins or aromatics spec. As per Mr. Yasunori Takei of Toyota Motor Corporation, member Japanese Gasoline Quality Committee, they can meet emission norms with tail pipe & technology combination and as such the olefins level in Japan vary from 2 to 30% vol.

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Briefly, as far as history of the EU gasoline olefins spec is concerned, the study did not investigate olefins effects as, at the time, this was not considered to be of sufficient priority -the emphasis was on aromatics, E100 and sulphur.

Auto industry, however insisted on its inclusion into the air quality modeling stage, the argument put forward was that higher olefins were linked to higher NOx and hence higher ozone. The data for this came from the earlier US Auto/Oil (AQIRP) programme and was questionable, being based predominantly from non-catalyst vehicles or ones fitted only with Oxycats (no three-way catalyst vehicles - thus different from all the EPEFE data).

Despite all this, politics prevailed and the EU ended up with an olefins spec.

Olefins Spec – Untold EU story

63

Fuel Quality

Gasoline

Attribute Unit Current Euro III Desired Change

b Sulphur ppm m 500/150 150 <150b Benzene % vol max 1 & 3 1 1b Aromatics %vol max no spec 42 No specb Olefins %vol max no spec 18 /21 No specb Ethanol %vol max 5 Optional Optional

Also, there is need to harmonize gasoline spec on BS II & BS III with respect to density & distillation.

Mandate tail pipe devices thru retrofit in metros.

64

National Policy of Bio Fuel

65

Ethanol Program in India

• IS 2796: 2000 permits 5% doping of ethanol in MS.

• Pilot projects started in sugar rich states UP and Maharastra(Aonla, Panewadi and Miraj) in June 2001.

• MOP&NG vide their Gazette Notification (Sr. No. 230, dated 3rd September 2002) mandated sale of 5% ethanol doped Motor Gasoline in India.

• WEF 01.01.2003, Govt mandated 5% doping in 9 states and 4 UTsi.e. Maharashtra, Gujarat, Goa, Uttar Pradesh, Haryana, Punjab, Karnataka, Andhra Pradesh & Tamil Nadu, Daman & Diu, Dadra & Nagar Haveli, Chandigarh & Pondicherry .

• Implemented in Uttranchal from 01.01.2004.

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Ethanol Program in India• BIS vide Amendment 3 to IS 2796:2000 in June 2003

provided specifications for 5% ethanol doped MS.

• IS 15464: 2004 issued for anhydrous ethanol.

• WEF 01.01.2006, GOI mandated 5% ethanol doping throughout the country.

• MOP & NG vide their letter dated 06.07.06 directed OMCs on import of ethanol to supplement the indigenous availability.

• MoP&NG directed to explore forming a joint venture company with Indian companies with a suitable partner in Brazil for ethanol production and import to India.

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Ethanol Program in India

• IS 2796: 2008 (fourth Revision) provided specifications for 10% Ethanol doped Motor Gasoline.

• MOP&NG vide their notification, dated 29.10.2008, directed to start 10% ethanol doping as pilot project in Aonla (UP) and Desur (Karnataka).

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National Policy on Bio-fuels• The Union Cabinet approved National Policy on Bio-fuels on

11th September, 2008

• Also approved for setting up of an empowered National Bio-fuels Coordination Committee, headed by Hon’ble Prime Minister of India and a Bio-fuel Steering Committee headed by Cabinet Secretary.

• Target of 20% bio-ethanol and bio-diesel by 2017 for the blending in MS and HSD.

• Bio-diesel production will be taken up from non-edible oil seeds in waste / degraded / marginal lands.

• Focus would be on indigenous production and import of Free Fatty Acid (FFA) based such as oil, palm etc. would not be permitted.

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National Policy on Bio-fuels• Bio-diesel plantations on waste lands would be

encouraged and not on fertile irrigated lands.

• Minimum Support Price (MSP) with the provision of periodic revision for bio-diesel oil seeds would be announced to provide fair price to the growers.

• Minimum Purchase Price (MPP) for the purchase of bio-ethanol by OMCs would be based on the actual cost of production and import price of bio-ethanol.

• Bio-diesel and Bio-ethanol may be brought under the category of “Declared Goods”.

• No taxes and duties to be levied on Bio-diesel.

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EXPERIENCE AS A BUYER OF ETHANOL

• Ethanol for Motor Gasoline as a research project1980 – field trial by IOC-R&D and IIP, Dehradun1993 – field trial by IIT and IOC-Marketing

• Pilot project for 5% Ethanol doped Motor Gasoline15.04.01 Miraj (Hazarwadi) 22.06.01 Bareilly (Aonla)24.06.01 Manmad (Panewadi)Pilot projects spread to 7 more locations

• MOP&NG gazette notification to dope 5% Ethanol in Petrol in 9 states and 4 union territories

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Other Issues & Conclusion :

• Harmonisation of System & Practices

• Manufacturing Specification

• Interphase Management

• Quality Give Away

• Quality Balancing Pool or Quality Credit

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RECAP/ CONCLUSIONS

• Oil (1/3rd) & Gas along with Coal will continue to play significant role

• Alternate energy may take another 20 yrs. to be significant

• Middle East contains 2/3rd of Crude Oil reserves• USA consumes almost 27% of total world• Oil - Saudi Arabia/ Iran/ Iraq is leading (41 yrs.)• Coal - China, USA, India leading the way (192 yrs.)• Gas - Russia/ Iran/ Iraq leads the way (67 yrs.)

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RECAP/ CONCLUSIONS

• Oil/ GDP elasticity (0.5-0.6)• India is growing about 4% and picked up 120 MMT

demand• Geo-political issues will continue to bother ……..

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