Pakistan State Oil plans to celebrate this years Independence Day by launching its ethanol blended fuel at thirty outlets across the country by August 14. But does this imply independence from imported crude oil with citizens flocking towards E-10 - wooed partly by its relatively lower price and partly by its environment friendly features. Not likely so.
So where does the devil lie? Indeed, in the details. It is no secret that E-10 - with 10-percent ethanol component in petrol - could be harmful for car engines in more than one way. And the irony is that there is an evident lack of co-ordination among the stakeholders, keeping in mind that PSO did not even consult domestic car makers.
Countries such as Brazil, where ethanol fuel is commonly used in vehicles, have had fuel tanks and engines specifically tailored for ethanol fuel consumption. But in Pakistan this has not been the case and therefore consumers will be risking engine problems and performance efficiency issues if they shift to E-10 without necessary modifications. These modifications should be targeted to arrest water absorption and contamination, which is a major problem as ethanol tends to absorb the moisture in fuel tank. Other key issues such as reduced engine efficiency, decreased life cycle of parts and engine, damage to metal & rubber in fuel system, lack of acceleration and many more matters must also be resolved before E-10 becomes common.
On a related note, bear in mind that E-10 fuel is primarily targeted to motorbike and 800cc cars made after the year 1990. Now PSOs MD Irfan Qureshi is said to have acknowledged last week that his firm has not consulted Japanese and Chinese bikes and cars makers. This implies that two-third of target market is largely untested yet - adding to the list of ambiguities over the vulnerability of these engines.
Plus, do not forget the price confusion. PSO says it will sell E-10 at Rs 59.8/liter initially, but this contradicts its own claim of maintaining a differential of Rs 3/liter with conventional petrol, given that in all likelihood petrol prices will decrease by 8 to 10 percent in August. Therefore, at Rs 59.8/liter E-10 would actually be more expensive than conventional petrol. What will be the new quoted price for E-10, it remains to be seen.
And while we are at it, the products potential impact on our import bill is somewhat exaggerated. Pakistan imports 85 percent of its crude oil consumption, which amounts to approximately 16 million metric tons. Out of this, refineries then convert about 8 percent of crude into petrol, totalling 1.28 million metric tones.
This implies that E-10s introduction would lower Pakistans imports by 127,401 metric tons, helping the country save $64 million, as against the widely quoted number of about $100 million. But even this saving is possible only if all petrol consumers shift to E-10 - which is not the case, as the product can not be used in cars manufactured before 1990.
Lastly a dilemma. Considering that sugarcane accounts for almost 40 percent of total feedstock used for ethanol production world over, the government will have to manage controllable factors in order to ensure adequate supply of cane to produce molasses - leading up to ethanol production.
This will call for better support prices for cane growers to discourage crop substitution and encourage adequate usage of DAP fertiliser. But then higher support prices will also increase domestic sugar prices. So its either cheap sugar or cheap oil.
It is not scaremongering to dismiss E-10 fuels introduction. It could have a bright future, but unless all stakeholders have been taken on board to formulate a workable plan to resolve these ambiguities; conservative Pakistani consumers are unlikely to pump E-10 just as yet.
Comments
Comments are closed for this article.