The government, despite a lot of resistance from the auto and oil sector, has directed the Oil Marketing Companies (OMC) to begin importing EURO-5 fuel in Pakistan, starting from the 1st of August, 2020. EURO-5 fuel is being used in numerous countries in the world, all of whom have scientifically testified its benefits, both to the environment and the cars.
To that effect, the Ministry of Energy (Petroleum Division) has mandated via policy guidelines that OMCs shall not be permitted to import fuel below EURO-5, from August 1, 2020, onwards. The said guidelines have been shared with the Oil & Gas Regulatory Authority (OGRA) to ensure compliance with the guidelines and the stated deadline.
For now, however, only petroleum of the EURO-5 rating shall be imported. As per the guidelines issued to OGRA by the Ministry of Energy (Petroleum Division), diesel imports shall see compliance with Euro-V standard starting from January next year. Though it must be noted that, in the event of long term agreement with Kuwait Petroleum Corporation, EURO-4 rated diesel fuel shall be imported.
As per the guidelines, the prevailing pricing mechanism shall be adapted to market the EURO-5 fuel. OGRA will calculate the price after consulting with the oil refineries and PSO to avoid giving an unfair advantage to the manufacturers producing fuel below EURO-5 specification.
For the longest time, the only countries that had been using RON 87 dirty fuel were Pakistan and Somalia. However, during their tenure, PML-N did formulate a policy to convert to RON 92 petrol. Although the said development is finally set to take place soon, the OMCs and the auto sector are none too pleased with it owing to various reasons. Whether or not this would have any effect on the supply and demand, remains to be seen.