No Initial Impact Of BS-VI Compliance Cost On Diesel, Petrol Prices

No Initial Impact Of BS-VI Compliance Cost On Diesel, Petrol Prices

While retail fuel outlets in Delhi have already started dispensing Bharat Stage (BS)-VI diesel and petrol despite April 1, 2018 being the official date for switch-over, there is an impending threat of a rise in prices. The oil marketing companies (OMCs), however, are not immediately passing on the increased cost of producing BS-VI fuel – equivalent to the Euro-IV, the best available standard across the world. Production cost of petrol has gone up by 24 paise per litre on an average and that for diesel has risen by 66 paise thanks to BS-VI compliance, according to an OMC executive. There are around 400 retail fuel outlets in Delhi and the city consumes roughly 0.95 million tonne of petrol and 1.265 million tonne of diesel a year. Taking into consideration the increased cost per litre, this converts to an additional cost of Rs 10 crore a year, which the OMCs may not initially pass on to consumers. However, once the BS-VI is rolled out across the country, OMCs may not be able to bear the extra cost and pass it on.

India’s demand for petrol was 23.7 million tonne and that for diesel stood at 76.02 million tonne in 2016-17, according to data from the Petroleum Planning and Analysis Cell. India’s has skipped the BS-V stage and is leapfrogging from BS-IV to BS-VI in the wake of high pollution levels. Vehicular pollution is one of the top contributors to air pollution. While the pan-India roll-out of BS-VI fuel is slated for April 2020, the petroleum minister asked the OMCs to start supply of the cleaner fuel in Delhi, which was choking under a thick smog post Diwali last year. The other major contributor to air pollution is stubble burning by farmers in the neighbouring states. Read More…

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