Oil refineries on Monday expressed reservations on the pricing formula for Euro-5 standard fuel and said that they were not consulted regarding the determination of its price and value.
In a letter written to the Petroleum Division, Pak-Arab Refinery Company Limited (PARCO), Byco, National Refinery Limited (NRL), Pakistan Refinery Limited (PRL) and Attock Refinery demanded a meeting with the government and said that consultation should be held on the pricing system of Euro-5 standard fuel before its adoption.
According to a report published by a local media outlet, oil refineries complained that the government did not give them ample time to switch from the lower grade Euro-2 fuel to Euro-5 standard. “There are serious flaws in the guidelines regarding Euro-5 fuel,” the letter written by the refineries said.
The letter urged the government to call a meeting of the Ministry of Petroleum, Oil and Gas Regulatory Authority (OGRA), oil refineries and companies.
Earlier in August, the government said that it was looking to upgrade fuel used in Pakistan to a more environment-friendly Euro-5 standard in a bid to counter air pollution, despite resistance from oil refineries.
According to reports, oil refineries will have to upgrade their plants in order to supply the lower emission producing Euro-5 fuel.
The government had also directed Oil Marketing Companies (OMCs) to import Euro-5 standard fuel. Euro-5 standard petrol will be imported from September 1 while Euro-5 diesel will be imported from January 1.
Out of the 3,500 pumps owned by Pakistan State Oil (PSO) across the country, 56 are already supplying Euro-5 standard fuel which is offered at approximately Rs20 higher than normal fuel.
The Euro-5 fuel does not only produce lower emissions but also improves engine performance.
However, if the government is able to implement its plan regarding the upgradation of fuel, refineries will still need three years to upgrade its production units.