Petrol, diesel prices to increase from April after BS-VI switch
People across India will soon have to pay more for petrol and diesel as the country upgrades to low-emission Bharat Stage VI fuels from April 1. National oil marketer Indian Oil Corporation (IOC) on Friday said there will be a "marginal increase" in fuel retail prices. Reportedly, the IOC alone has spent over Rs. 17,000 crore to upgrade refineries to produce BS-VI grade fuel.
There will definitely be a marginal price increase: IOC Chairperson
IOC Chairperson Sanjiv Singh said, "There will definitely be a marginal increase in retail prices of fuels from April 1 when the whole country will run on new fuels," PTI reported. BS-VI fuel complies with European emission standards and has a sulfur content of 10 ppm. India is making the switch directly from BS-IV grade fuel, which has a sulfur content of 50 ppm.
State-run oil companies spent Rs. 35,000 crore for BS-VI upgrade
Singh said that state-run oil marketing companies (OMCs) have spent Rs. 35,000 crore to upgrade plants to produce BS-VI grade fuel. Sell-off bound Bharat Petroleum Corp (BPCL) said that the upgrade cost it Rs. 7,000 crore.
Price hike will not burden customers, Singh said
Although it has been reported that companies will have to hike prices by 70-120 paisa per liter after switching to BS-VI fuels, Singh said that coming up with such a weighted average is not possible considering the complexities of each refinery. Without disclosing the exact amount of the price hike, Singh promised that the increase in prices will not burden customers.
Retail prices will be benchmarked against Euro-VI prices
Singh also said that the prices will be benchmarked against Euro-VI prices as opposed to the current cost-plus model. He added, "We're not looking at this investment from a pure return on investment basis, but this is a national mandate and we have done it."
IOC already switched to BS-VI, barring few remote locations
IOC already made the switch to BS-VI fuels a fortnight ago, Singh said, and all its depots and containers are ready for production. Singh mentioned that a few remote locations are yet to make the switch since their intake is very low. He said that, at such locations, the company plans to drain the remaining BS-IV stock and replace it with BS-VI.