The oil and gas downstream sector has been in the limelight for some odd reasons of late. On one hand, the refineries are warning the government for imminent closure due to the shutdown of both private and public oil-based power plants. While on the other hand, the issue between Honda and the OMCs over fuel quality has sparked a new debate.
Let’s look where the latter issue stands. Honda Motor’s Pakistan subsidiary, Honda Atlas Cars (Pakistan) Ltd, filed a complaint to Ogra saying that the fuel sold by PSO, Shell and Total have additives that are harming the engines in its vehicles. It had blamed high manganese content in the recently upgraded fuel 92RON, which was causing engine knocking, choking of the catalyst converter, and serious effects on human health.
This was the beginning of the fiasco, which was met with serious reservations from the oil marketing companies. In a retaliatory move by the OMCs, the Oil Companies Advisory Council (OCAC) threatened Honda Pakistan of a legal action adding that the fuel being sold in the country adheres strictly with the approved specifications issued by the Ministry of Energy, Petroleum Division.
Honda’s complaint seemed to gain traction after HASCOL – a member of OCAC clan - also asked the government to limit the chemical content in petrol. However, the issue has raised some questions no other car manufacturer or assembler – local or foreign – seems to have issues with the fuel quality. While Honda had mentioned in the complaint that the car manufacturer had to suspend its latest variant 1.5 Turbo VTEC car due to substandard fuel quality, OCAC pointed out the variant’s improperly calibrated catalytic converter to the fuel in Pakistan for the issues faced by the car manufacturer.
In response to queries sent by BR Research on the existence standards for the specifications of the petroleum products and any limits for additives like manganese, Ogra replied that it monitors the conformance of the specifications of petroleum products (including gasoline) as approved/ notified by Ministry of Energy (MOE) (Petroleum Division).
Though the regulator has started a quality check of the petroleum products where it has asked the Hydrocarbon Development Institute of Pakistan (HDIP) to evaluate the fuel sample collected from across the country, it is important to highlight that according to Ogra, in the GOP’s specifications for local/ imported petrol, the parameter in question (i.e. manganese) and its limit is not specified; which leads to questions like the best global practices or standards be followed.
Honda’s complaint highlighted that the test results showed levels of manganese of up to 53 milligrams per kilogram (mg/kg) compared to the danger level at 24 mg/kg. However, Ogra says that applicable standards in the country are those which are approved/ notified by MOE; every country notifies its own specifications, and that mainly depends upon the capability of its refineries and required/ applicable emission standards.
Whether the issue is real, or should be some limits, or the country should follow global practices, only the investigation results would bring answers.On that note, the regulator is ready to suggest any way forward to the MOE/GOP for any change in specifications (if required).
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