The deadly public sector

By Anil Agarwal
Published: Thursday 30 September 1999

It is indeed amazing. It was only four months ago, in April, that the Ministry of Petroleum was telling the Supreme Court that it is not possible for it to supply high quality diesel. And that all it could do is to supply diesel with a sulphur content of 0.25 per cent and even for that it needs more time. Ministry officials had told the court that the cost would run into several thousands crore, which they did not have.

A figure of Rs 15,000 crore has been bandied about in the media. And yet the government giant, Indian Oil Corporation ( ioc) , is now selling 0.05 per cent sulphur diesel in less than four months and is providing even low benzene petrol to boot. This raises a big question: How truthful are our officials when they make submissions before the Supreme Court?

The Environmental Pollution Control Authority ( epca ), set up by the Supreme Court to manage the pollution problems of Delhi, had approached the petroleum secretary for high quality petrol and diesel in early 1999 but the high official had said there that he, firstly, was not sure whether air pollution in Delhi was serious enough to warrant the huge expenditure and, secondly, he did not have the money to make any serious changes in fuel quality.

So why has ioc suddenly become so environment-friendly? The answer has nothing to do with the health of the people, for this public sector company. It is sheer fiscal interests. In April, the new actor in India's refinery sector, Reliance Petrochemicals, had written to the epca saying that it 'may' be able to supply 0.05 per cent sulphur diesel. The epca wrote back asking whether it is indeed capable of doing so and could it make a firm commitment. Reliance, eyeing the Delhi market, soon confirmed that it can do so.

This letter was enough to put the cat among the public sector pigeons. They knew auto manufacturers were strongly demanding better quality diesel to supply workable technology, the environmentalists were demanding the same for health reasons, and it was, therefore, quite possible that the Supreme Court would order the same. Not wanting to lose a huge market, the ioc rushed in to protect its interests. A senior ioc official even told the Down to Earth newsmagazine that the company could have easily made the change but it was the bureaucrats in the petroleum ministry who were holding up everything.

ioc indeed had to spend money to make the change but the cost was not even a fraction of what the ministry of petroleum has been claiming. God alone can help a country in which bureaucrats are not even afraid to lie before the Supreme Court. Even if they didn't know at that time that this was possible and were, therefore, technically not lying, surely they had not done their homework properly. And, of course, don't ask what the minister of petroleum was doing at that time. Who cares, definitely not these politicians if a few people die!

In Delhi, the levels of particulates are extremely high in the city's ambient air and diesel is the biggest source of extremely tiny particles which are, from a public health point of view, the most dangerous. Moreover, diesel produces sulphate particles which are the most dangerous of all particles.

If the level of suspended particulate matter in Delhi's ambient air has to be reduced, and the target set to reduce this is as much as 90 per cent, which it is of now -- then diesel use has to drop dramatically.

The Supreme Court has already ordered that all buses must change over to cng (Compressed Natural Gas) by April 2001, which will probably reduce 25-30 per cent of the particulate matter produced in vehicular emissions. But as the goods vehicles cannot easily move on to cng , it is vital that better quality diesel be made available, which, as Swedish studies show, will probably reduce the particulate emissions from these vehicles by about 5-10 per cent. Therefore, the drop will not be dramatic but given the high use of diesel in Delhi, definitely of some value.

With ioc producing 0.05 per cent sulphur diesel, a major obstacle has been removed in enforcing the euro ii standards across the country. Now other Indian cities can also start demanding the same. What is interesting is that ioc has taken proactive action even to prevent any environmental threat affecting its petrol market in Delhi.

More and more information has been leaking out that benzene levels are also extremely high, a problem that comes from petrol vehicles, especially the two-stroke vehicles. Though catalytic convertors reduce benzene substantially, all Indian cars and scooters are unlikely to have these devices fitted for a very long time. The only option, in the interim, is to reduce the benzene content of petrol. ioc knew that some action was coming also on this and moved fast.

It is clear that the state does not function in India. But, in this case, what seems to have worked is a combination of non-governmental organisation and court pressure and a good measure of competition.

The politicians and the bureaucrats can go hang themselves.

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