Public vs profit

The public sector giant did the right thing for the wrong reason

Published: Thursday 30 September 1999

Public vs profit

-- ioc's move to supply ulsd (with 0.05 per cent sulphur content) to the National Capital Region ( ncr ) of Delhi came as a pleasant surprise for those campaigning for the right to clean air. The company says it has also started supplying premium grade, lead-free, low benzene petrol ( lbp , with 0.92 per cent benzene) to the entire country. However, experts say this step is not driven by concern for air pollution or public health but propelled solely by market competition, a very poor reflection on India's public sector (see p4: The deadly public sector ).

P S Rao, executive director of ioc 's Gujarat refinery, acknowledges that the move for cleaner diesel is linked to competition from Reliance. "We had been facing direct competition from Reliance Industries... So we decided to produce the number one product in the market and remain the leader," he told Down To Earth . This clearly shows the priorities of the public sector undertaking.

"The company's move proves that the Indian refineries can be pushed to clean up their act. Ironically, only a few months back, mpng had pleaded in the Supreme Court about how difficult it would be in the near future to further lower the sulphur level in diesel. Fearing loss of market to the Reliance group, ioc acted fast to stave off competition. Laws of the market proved to be more potent than concern for public health," says Anumita Roychowdhury, coordinator of the New Delhi-based Centre for Science and Environment's Right To Clean Air Campaign. "For the first time, the refineries seem to be competing on the basis of the environmental performance of the fuel they produce," she adds.
Unfolding of the drama A report published in the newspaper Financial Express said that mpng had pleaded in its affidavit to sc on April 29, 1999, that "reducing sulphur content in diesel from the existing 0.25 per cent to 0.05 per cent would cost the government a whopping Rs 15,000 crore".

A subtle drama unfolded thereafter. In May, Reliance wrote to the Environment Pollution (Prevention and Control) Authority ( epca , set up to monitor the progress of sc orders on pollution control in ncr and advise the court on the matter), saying that it might be able to supply ulsd in Delhi. In response, epca chairperson Bhure Lal asked for a firmer assurance from the company on its ability to supply ulsd . Reliance responded to confirm that it would.

This sent mpng into a tizzy, as Reliance's entry into the Delhi market would have meant loss of market for the public sector refinery ioc . With all excuses forgotten, ioc paced up quite remarkably to lower sulphur level further to protect its market. As if from nowhere, the petroleum bureaucracy discovered the said Rs 15,000 crore to provide clean diesel to Delhi. With a newly found self-righteousness, ioc brought out a full-page advertisement in a Delhi newspaper saying that it was bringing "a breath of fresh air to Delhi" by introducing ulsd . ioc on its own has moved rapidly to provide lbp , which can greatly help reduce the very high levels of benzene, a carcinogen, in Delhi's air.

ncr is receiving ulsd from ioc 's Mathura refinery from September 1, 1999. Although the diesel is supplied to only the 5,000 buses of the Delhi Transport Corporation for the time being, efforts are being made to supply ulsd to all parts of the capital. Reports in the media say that the oil industry has so far spent Rs 5,600 crore on diesel hydro de-sulphurisation. ioc has spent about Rs 1,776 crore. Rao says the Gujarat refinery has invested Rs 500 crore for production of high quality fuels.

"Earlier, these very people were saying they have no money. Reliance was the only one to come forward," says H B Mathur, professor at the Delhi College of Engineering. According to Rao, being a government enterprise is a disadvantage: "We had to upgrade our technology, and being in the public sector, we cannot take fast decisions as the private sector can." He adds that the government neither respected the company's efforts nor gave any incentives for their earlier achievements. Blaming the government for ioc 's inaction, Rao says that ioc employees asked themselves why should they do anything if there are no incentives.

Is this enough?
No, feel the experts, saying that ioc 's move should not breed complacency about the pace of dieselisation of the private vehicle fleet in Delhi. "Along with reducing the sulphur content in diesel, other things, such as an increase in the anti-knocking characteristics and reduction in the aromatic contents, are also needed. Without these things, the problems of diesel emissions will persist," says Mathur.

" ioc 's move to introduce ulsd is still not a solution to the problem of diesel emissions. Not only is 0.05 per cent sulphur content quite retrograde compared to the world standards of 0.001 per cent sulphur but this will also fail to make much of an impact on particulate emissions from diesel vehicles, which is the most serious public health concern in Delhi. Swedish studies show that reducing sulphur content from 0.2 per cent (which is close to the current level 0.25 per cent available in Delhi) to 0.05 per cent will only reduce particulate emissions by about 8-10 per cent," says Roychowdhury. "If Delhi has to have clean air, it has to reduce the particulate load in the air by about 90 per cent."

Particulate pollution is too serious a problem in Delhi and the only solution to it is to move away from diesel. In its order of July 28, 1998, sc has already directed the Delhi government to move the entire bus fleet to run on compressed natural gas by 2001 to control air pollution. It therefore is unjustified to allow a private car fleet to come up to run on cheap diesel.

But the automakers have something else on their mind: profit. They argue that diesel is the 'fuel for the future' and diesel cars are increasingly gaining acceptance across the world, especially in Europe, because they are more fuel efficient and emit less carbon dioxide as compared to petrol, thus helping combat global warming due to greenhouse gases. While it is true that sales of diesel cars have been increasing in Europe (see table: Increase in diesel car sales in Europe ), it is also true that the situation of particulate matter pollution in Indian cities, especially Delhi, is much worse than in European cities. And the sales of diesel cars have been increasing in Europe due to reasons very different from those in India.

According to Michael Walsh, editor of Car Lines and former air pollution control specialist at the us Environ-mental Protection Authority, European countries have been much more conscious about controlling global warming than usa . As a result, several car companies have promoted diesel in Europe. But governments are now beginning to counter this response to global warming by tightening diesel emission standards, concerned by the growing evidence about the health effect of diesel particles. Also, what the promoters of diesel in India deliberately hide - or chose to ignore - is how governments in Europe, usa , Australia, Japan, and Southeast Asia have been clamping down on diesel to control air pollution. These governments have responded fast to the mounting scientific evidence on the harmful effects of diesel particles.

Increase in diesel car sales in Europe

As Europe is quite concerned about reducing emissions of carbon dioxide, car companies have touted disel as the solution. Consequently, sales have gone up
COUNTRY 1980 1985 1990 1995
Germany 8.0 22.1 10.8 14.6
Austria 3.3 13.7 25.7 42.6
Belgium 13.8 26.4 32.9 46.8
France 9.9 15.0 33.0 46.5
Italy 8.1 25.1 7.3 10.3
UK 0.4 3.6 6.4 20.2
Sweden 6.0 2.2 0.6 2.8
Europe sales weighted average 7.2 15.6 13.9 22.1

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