Looking higher: Abbasi’s new-found hate for current fuel
Wants Pakistan to upgrade from RON 87 to RON 92 spec gasoline; domestic refineries argue against.
Standard petrol sold at pumps in Pakistan has RON (Research Octane Number) specification of 87. PHOTO: REUTERS
KARACHI:
Last month, Petroleum Minister Shahid Khaqan Abbasi was in his element, as he spoke to industry executives in Karachi and stressed on having appropriate fuel storage facilities to avoid a repeat of the January-like shortage and need for refineries to distil better quality fuels.
Then, in his way of making serious things sound funny, he said, “I fail to understand why we use RON 87 gasoline. I have asked this so many times but no one has been able to explain it. Pakistan and Somalia are apparently the only two countries that continue to use this type of petrol.”
His comment stirred a controversy that has divided downstream petroleum industry with some executives siding with the minister and others bitterly opposing him.
Standard petrol sold at pumps in Pakistan has RON (Research Octane Number) specification of 87, which measures petrol’s ability to resist knocking as it burns in the engine’s combustion chamber.
“Don’t we deserve better fuel? I have raised this simple question before the industry,” Abbasi told The Express Tribune. “Why is it that the other 190 countries are not using Ron 87? What is it that we know about fuels and they don’t?” Or vice versa.
He believes that Pakistan should start importing RON 92 spec gasoline. “RON 87 is not even categorised as gasoline now. It’s a blend made by traders especially for us. That is one reason major suppliers are not even interested in selling petrol to us.”
While no decision has been taken on upgrading specification, at least one marketing company – Shell Pakistan – is in talks with the petroleum ministry to explore the possibility of importing higher RON petrol.
“I am open to discussion. We will listen to the industry. The whole idea of this is to start a debate,” Abbasi said.
Every day around 15,000 to 17,000 tons of petrol is sold in Pakistan. But nearly 70% of this is imported – something that has added weight to Abbasi’s argument.
What the refineries say
But the five domestic crude oil refineries, designed to produce RON 87 petrol, stand against the decision of abrupt change in specification.
Pakistan Refinery Limited (PRL) CEO Aftab Husain denies that the entire world has moved beyond RON 87 except for Pakistan.
“There is no standard specification for everyone to follow. Each country has its own specific needs. Even in the United States, they use gasoline of octanes 87, 92 and 94.”
His view is supported by petroleum giant Chevron’s Motor Gas Tech Review, which says grade of unleaded petrol sold in the US ranges from 87 to 94.
Superior RON means higher price at the outlets. And some industry executives ask if consumers are ready to pay a premium for higher octane.
“Around 55% of petrol is consumed in motorbikes. Now someone who owns a bike doesn’t need RON 92 or 94, which is a luxury and will cost Rs3 to Rs4 more for a litre,” Husain said.
What adds to the worry of Pakistani refineries is the collective investment of $500 million that they have made to upgrade plants to produce more petrol.
For instance, PRL, which used to produce 12,000 tons a month, increased its output to 24,000 tons from August after its isomerisation unit became operational.
“We have spent millions of dollars on this unit, which is designed on the specification of producing RON 87 petrol. And now there is talk of introducing some other type of fuel,” complained Husain.
It’s not as if Pakistani refineries cannot produce higher octane petrol.
But if they start doing that, the yield would go down and plant shutdowns would be seen more often. There will also be pressure of added costs.
RON is often confused with the environmental specification (EURO standards) of petrol, which actually depends on ratio of chemical components like benzene and sulfur.
Representative body of refineries and marketing companies ‘Oil Companies Advisory Council (OCAC)’s Head Ilyas Fazil said refineries were already striving to meet EURO II standards.
He said Shell Pakistan’s proposal was to try feasibility of higher octane petrol as a test case. “It falls under a deregulated regime and we have no issues with that.”
While there are differing opinions on the effects RON 87 has on cars running on Pakistani roads, it is generally believed that new models should use a blend of RON 87 and high octane blending component (HOBC).
The writer is a staff correspondent
Published in The Express Tribune, September 7th, 2015.
Last month, Petroleum Minister Shahid Khaqan Abbasi was in his element, as he spoke to industry executives in Karachi and stressed on having appropriate fuel storage facilities to avoid a repeat of the January-like shortage and need for refineries to distil better quality fuels.
Then, in his way of making serious things sound funny, he said, “I fail to understand why we use RON 87 gasoline. I have asked this so many times but no one has been able to explain it. Pakistan and Somalia are apparently the only two countries that continue to use this type of petrol.”
His comment stirred a controversy that has divided downstream petroleum industry with some executives siding with the minister and others bitterly opposing him.
Standard petrol sold at pumps in Pakistan has RON (Research Octane Number) specification of 87, which measures petrol’s ability to resist knocking as it burns in the engine’s combustion chamber.
“Don’t we deserve better fuel? I have raised this simple question before the industry,” Abbasi told The Express Tribune. “Why is it that the other 190 countries are not using Ron 87? What is it that we know about fuels and they don’t?” Or vice versa.
He believes that Pakistan should start importing RON 92 spec gasoline. “RON 87 is not even categorised as gasoline now. It’s a blend made by traders especially for us. That is one reason major suppliers are not even interested in selling petrol to us.”
While no decision has been taken on upgrading specification, at least one marketing company – Shell Pakistan – is in talks with the petroleum ministry to explore the possibility of importing higher RON petrol.
“I am open to discussion. We will listen to the industry. The whole idea of this is to start a debate,” Abbasi said.
Every day around 15,000 to 17,000 tons of petrol is sold in Pakistan. But nearly 70% of this is imported – something that has added weight to Abbasi’s argument.
What the refineries say
But the five domestic crude oil refineries, designed to produce RON 87 petrol, stand against the decision of abrupt change in specification.
Pakistan Refinery Limited (PRL) CEO Aftab Husain denies that the entire world has moved beyond RON 87 except for Pakistan.
“There is no standard specification for everyone to follow. Each country has its own specific needs. Even in the United States, they use gasoline of octanes 87, 92 and 94.”
His view is supported by petroleum giant Chevron’s Motor Gas Tech Review, which says grade of unleaded petrol sold in the US ranges from 87 to 94.
Superior RON means higher price at the outlets. And some industry executives ask if consumers are ready to pay a premium for higher octane.
“Around 55% of petrol is consumed in motorbikes. Now someone who owns a bike doesn’t need RON 92 or 94, which is a luxury and will cost Rs3 to Rs4 more for a litre,” Husain said.
What adds to the worry of Pakistani refineries is the collective investment of $500 million that they have made to upgrade plants to produce more petrol.
For instance, PRL, which used to produce 12,000 tons a month, increased its output to 24,000 tons from August after its isomerisation unit became operational.
“We have spent millions of dollars on this unit, which is designed on the specification of producing RON 87 petrol. And now there is talk of introducing some other type of fuel,” complained Husain.
It’s not as if Pakistani refineries cannot produce higher octane petrol.
But if they start doing that, the yield would go down and plant shutdowns would be seen more often. There will also be pressure of added costs.
RON is often confused with the environmental specification (EURO standards) of petrol, which actually depends on ratio of chemical components like benzene and sulfur.
Representative body of refineries and marketing companies ‘Oil Companies Advisory Council (OCAC)’s Head Ilyas Fazil said refineries were already striving to meet EURO II standards.
He said Shell Pakistan’s proposal was to try feasibility of higher octane petrol as a test case. “It falls under a deregulated regime and we have no issues with that.”
While there are differing opinions on the effects RON 87 has on cars running on Pakistani roads, it is generally believed that new models should use a blend of RON 87 and high octane blending component (HOBC).
The writer is a staff correspondent
Published in The Express Tribune, September 7th, 2015.