Reliance Petroleum Ltd (RPL) is planning to tap the global shift in demand for upgraded fuels that meet tighter fuel emission norms under Euro III and Euro IV. The refining arm of Reliance Industries, RPL is targeting to capitalise on the early mover advantage in this particular segment of the global refining industry.
Reliance Petroleum is setting up a 5.80 lakh bpd export-oriented refinery at a cost of Rs 27,000 crore at Jamnagar for the same. This project is likely to be commissioned towards the end of next year.
“Our new refinery at Jamnagar is totally export-oriented and will be able to produce under not only Euro IV but even Euro V norms. I feel this is an opportunity for RIL to enhance margins on the premium products from the global petroleum business,” PMS Prasad, president, petroleum business, RIL, told Express News Service.
For the Euro III and IV, specifications to become environment friendly have become even more stringent. The sulphur content in Euro IV compliant fuels has been restricted to 50 ppm. Specifications in discerning markets like the US and Europe are even more severe.
“The US has moved to 30 ppm sulfur in Gasoline, with the state of California having already implemented below 25 ppm specification. The EU member states have agreed to reach a target of below 10 ppm by 2009,” said Prasad.
He also added that in the US regulations have already mandated that 80% of the existing diesel used for transportation will be replaced by ultra low sulphur diesel (ULSD) by 2010.
According to a Mumbai-based analyst, “It appears very clearly that RPL, which proposes to export its gasoline to the US market, is definitely geared to fetch a premium price from supplying the required grade of fuel and the superior alkylate blendstock. The RPL refinery will stand to gain in the future gasoline market.”