ISLAMABAD: The recent government decision for introduction of Euro-V petrol and High Speed Diesel (HSD) in the country is pre-mature owing to old vehicular fleet, non-compliant refineries, unprepared government machinery and will waste public money and burden majority of lower middle income consumers.

This was the crux of opinions expressed by petroleum experts at a virtual moot organised by Islamabad Policy Institute (IPI) — a think tank — which also released its report “Rushed Transition to Euro-V Standard Fuels: Need for A Public Debate”.

Speakers asked government to put on hold its timelines for the implementation of Euro-V fuel standards in the country to enable stakeholders to adequately prepare for the transition and warned that a hurried shift could affect the attainment of the goal of environmental improvement.

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They said the country’s 50 per cent vehicular fleet comprised motorbike owners who were already paying Rs8-10 per liter higher price on existing Euro-II 92RON petrol which was way beyond their engine capacity.

Dr Ilyas Fazil, who previously worked as member oil of the Oil & Gas Regulatory Authority (Ogra) and Chief Executive Officer of Oil Companies’ Advisory Council (OCAC) and authored the report pointed out a number of inadequacies of the downstream petroleum sector for such an immediate jump from Euro-II to V standards.

As per the government instructions, all petrol imports from September 1, 2020 would have to be in accordance with Euro-V specifications while HSD would follow suit in six months down the road. “Introducing fresh specifications for transport fuels — Premium Motor Gasoline and High Speed Diesel — is a very serious issue and entails looking at the decision holistically which was not done in 2016 nor appeared to have been done this time as well,” Dr. Fazil pointed out.

The report has raised questions about the readiness of local refineries for producing Euro-V fuels, limitations of the existing retail network and upcountry storages, improperly defined Euro-V specifications, inadequate product testing capacity of the relevant institutions, and the absence of Euro-V-compliant engines on country’s roads. They advocated that unless these shortcomings were adequately addressed, not only will the desired environmental impact not be achieved but more importantly Pakistan will be spending millions of dollars without justification.

This would have a negative effect on the balance of payments, and at the same time overburden consumers. “The problems faced by Oil Marketing Companies and the country’s import infrastructure due to variation in specifications, terminal storages along with dispensing units at the retail outlets will definitely lead to product shortages if not recognised and immediate action is not taken to remedy them,” Dr Fazil warned.

He opined that the transition cannot be completed unless the refineries are upgraded to produce Euro-V standard fuels, which may take up to three years. “Unless that happens, there would be greater reliance on importing Euro-V fuel, which could cost millions of dollars to the national exchequer,” he said.

Published in Dawn, September 3rd, 2020