PSO to introduce better-quality diesel in January

It will reduce pollution, meet higher emission standards

Salman Siddiqui October 25, 2016
It will reduce pollution, meet higher emission standards. PHOTO: AFP

KARACHI: Pakistan State Oil (PSO), the market leader in fuel sales, will introduce an environment-friendly diesel in January to allow motorists to have a better driving experience across the country.

“Sulphur content in the new diesel quality will be 90% lower than at present,” PSO Managing Director Sheikh Imranul Haque told The Express Tribune, adding the better-quality diesel would carry 500 parts per million (ppm) sulphur content against 5,000 ppm in the diesel currently available at fuel outlets.

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Haque, who is also the CEO of the state-owned firm, said the company would start importing and marketing the new diesel quality in January.

Japanese auto assembling firms in Pakistan have already rolled out passenger cars carrying Euro-II engines. Many of them require the new diesel, which will reduce pollution and help meet higher emission standards.

However, 500 ppm is not the finest quality diesel in the world. Some two dozen countries have already shifted to the diesel having ultra-low sulphur content of 50 ppm only. PSO, which is currently busy in replacing the out-dated motor gasoline (RON87) with better quality RON90, along with other oil marketing companies may shift to the ultra-low-sulphur diesel in the coming years.

Although the company is about to receive the first shipment of RON92 petrol, it will only sell RON90 in the market. “We will sell a mixture of imported RON92 and low-quality petrol being produced by local refineries. On average, the available petrol at fuel stations will be RON90,” said Haque.

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RON90 will be sold at a higher price compared to RON87 and will be available from the first week of November. The two improved-quality fuels - petrol and diesel - will give PSO an edge to increase its market share. According to Haque, currently PSO has an average market share of 55-56% in all kinds of petroleum products.

Storage capacity

PSO is also conducting a feasibility study to improve its oil storage capacity in the near future. “The objective of the feasibility study is to improve oil reserves beyond the minimum limit (of 20 days),” he said.

At present, the company manages oil reserves for about 15 days. The reserves keep the fuel supply smooth for consumers such as motorists, aviation industry and armed forces. Haque said PSO’s working capital had improved in the quarter ended September 2016 as the company paid more attention to cash-paying customers in the power producing sector.

Furnace oil remained the company’s largest selling product. “The share of other products, including motor gasoline and diesel, will also go up in December,” he believed.

“The government may deregulate the pricing of petrol and diesel once the better quality products are imported,” he said.

Babu culture to go

Moreover, the company is keen on changing its work environment to bring it in line with the private sector.

“The Babu culture is going to be over at PSO as our management team will be there at the fuel stations,” said Haque. “The staff will make sure that the entire system works efficiently.”

Published in The Express Tribune, October 25th, 2016.

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numbersnumbers | 3 years ago | Reply | Recommend Note that after mixing imported RON 92 with locally produced gas to achieve RON 90, the resulting mixture may have an AKI (Anti knock index) of 85 which is still below the world standard rating of AKI 87 for regular fuel! BTW, AKI = (RON + PON) divided by 2.
Virkaul | 3 years ago | Reply | Recommend And all this will be imported? No refinery in Pakistan has Diesel Hydro Desulphrisation Unit?
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