Auto fuel prices to go up

“With the introduction of Euro IV grade auto fuel replacing the existing grade in 13 cities from April 1 the additional cost of petrol is likely to go up by nearly Rs 0.41 per litre and that of diesel by Rs 0.26 a litre,” Union Petroleum Secretary S Sundareshan said here on Wednesday.

The additional cost on Euro IV complied fuel could be passed on to consumers, Sundareshan indicated.
As per fuel specifications committed to the Supreme Court, oil companies are to sell petrol and diesel in keeping with the stringent Euro IV specifications, while Euro III grade fuel is to be supplied in the rest of the country.

The 13 cities include four metro cities—Delhi, Mumbai, Chennai and Kolkata—with the others being Hyderabad, Bangalore, Lucknow, Kanpur, Agra, Surat, Ahmedabad, Pune and Sholapur. State-owned oil marketing companies (OMCs) have invested over Rs 40,000 crore in upgrading their refineries to produce cleaner Euro IV grade fuel.
“The hike of Rs 0.41 for a litre of Euro IV complied petrol and Rs 0.26 per litre in diesel is as per the requirement to bring the domestic rate to international parity,” Sundareshan clarified.

He argued that if the capital expenditure of nearly Rs 40,000 crore incurred by oil firms in upgrading their facilities to produce Euro IV fuel was taken into consideration, the hike would be more.

The actual price hike needed to cover the cost would have been three to four times the proposed increase, he explained. Similarly, a marginal increase in petrol and diesel prices is also proposed in the rest of the country where the switch over would be from the existing Euro II grade fuel to Euro III specification.

“The quantum of price hike for Euro III fuel has not been finalised as there is some delay in up-gradation of some of the refineries. The delay in up-gradation of refineries may lead to postponement of introduction of Euro III grade across the country as late as October 1,”  Sundareshan said.