- Premium on BS6 fuel to recover investment in production of less polluting fuel
- Subject to approval, BS6 petrol and diesel likely cost dearer by Rs 0.80 and Rs 1.50, respectively
- Public sector companies have spent close to Rs 80,000 crore to reach BS6 levels
The government is considering a proposal which will allow oil marketing companies to charge premium on retail prices of petrol and diesel to recover their investment in producing less polluting fuel. Media reports indicate that the public and private sector oil marketing companies have appealed to the petroleum ministry to support a plan for hiking consumer prices of auto fuels to help them recover a portion of investments made in upgrading the refineries to produce BS6 fuel.
Consumers may feel the pinch of higher fuel prices if this proposal is accepted by the government as the per litre retail prices of petrol and diesel might cost dearer by Rs 0.80 and Rs 1.50 respectively, for the next five years. The media report further adds that the global market has largely remained flat for past several months due to a slower demand. This has resulted in reduced retail prices of petrol and diesel on numerous occasions in past few weeks. But if premium price is allowed, retail fuel prices would not reflect global pricing trend but would remain artificially higher at all times.
Refineries of public sector companies (Indian Oil, Hindustan Petroleum and Bharat Petroleum) have reportedly spent close to Rs 80,000 crore to reach BS6 levels after rolling out BS4 compliant fuel for national introduction in April 2017. Private refiners like Nayara Energy (formerly Essar Oil) and Reliance Industries have made considerable investment to upgrade their facilities ahead of the nationwide launch of BS6 compliant fuel on 1 April, 2020.
Source - ANI
