India joins select list of countries, starts producing ‘Reference’ fuel

India has started production of 'Reference' Petrol and Diesel on 26 October 2023. With this, India now becomes one of the few countries that produce highly specialized fuel which is used for testing automobiles.

A strong step towards Aatmanirbhar Bharat:

• Starting production of 'Reference' fuel in India is another step towards Aatmanirbhar Bharat (self-reliant India) as it will reduce India's dependence on mineral oil imports from foreign countries.
• These fuels, having high specifications, are important for testing by automobile manufacturers and testing agencies like International Center for Automotive Technology (ICAT) and Automotive Research Association of India.
• India has, for decades, been dependent on imports to meet the demand for these specialty fuels.

Indian Oil Corporation (IOC) developed this technology:

• Indian Oil Corporation (IOC) has this indigenously developed product which will replace imports, thereby ensuring reliable supply at much lower costs to vehicle manufacturers and testing agencies.
• In this context, Petroleum Minister Hardeep Singh Puri said that there are only three suppliers of reference fuel in the world, which also includes American giant Chevron.

Paradip refinery will produce 'Reference' fuel from Panipat 

• IOC's Paradip Refinery in Odisha will produce 'Reference' grade petrol. From here on the reference gasoline (petrol) fuel will be available in E0, E5, E10, E20, E85, E100.
• While its Panipat unit in Haryana will produce B7 grade diesel with reference diesel fuel quality.

IOC's regular and premium fuels:

• Fuel retailers like IOC sell mainly two types of petrol and diesel through their fuel station network – regular and premium.
• The biggest difference between regular and premium fuel is in the octane number. Regular fuel has an octane number of 87. Whereas the octane number of premium fuel is 91.
• Reference grade fuel comes with 97 octane number.

What is the octane number?

• Octane number is actually nothing but a unit to measure the combustion quality of petrol or diesel.
• For vehicle testing purposes, the fuel must be of a higher grade than regular or premium petrol and diesel.

What is reference fuel?

• This ranges from cetane number to flash point, viscosity, sulfur and water content, hydrogen purity and acid number - all listed under government regulations, such fuel is known as 'reference' petrol/diesel.

Reference fuel usage:

• These reference fuels are primarily used for emissions testing of vehicles equipped with spark ignition engines.
• Reference fuels (gasoline and diesel) are premium high-value products used for calibration and testing of vehicles by auto OEMs and organizations involved in testing and certification in the automotive sector.

Producing 'reference' fuel domestically will reduce costs by:

• Producing 'reference' fuel domestically would also reduce costs.
• The imported 'reference' fuel comes at Rs 800-850, compared to Rs 90-96 per liter of regular petrol and diesel.
• Producing 'reference' fuel domestically would reduce its cost to about Rs 450 per litre.
• In line with the government's objective of becoming self-reliant, IOC has started production of fuel in its refineries.

Benefits of this:

• The indigenously developed reference fuel will promote import substitution at better prices and minimum turnaround time for vehicle manufacturers.

IOC, BPCL and HPCL control 90% of the market in the country:

• Apart from IOC, Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) are the other two major fuel retailers in the country.
• These three government-owned companies control approximately 90% of the market.

Target to make the country 'energy-independent' by 2047:

• According to Union Minister Hardeep Singh Puri, after meeting the domestic requirements, IOC will also tap the export market for the fuel.
• The Union Minister mentioned the 'four-pronged energy security strategy' adopted by the government to make the country 'energy-independent' by 2047.
• The ‘four-pronged energy security strategy’ includes diversification of energy supply, increasing exploration and production footprint, completing the energy transition through alternative energy sources and a gas-based economy, and green hydrogen and EVs.

Use of 20% ethanol blended petrol by 2025 to reduce carbon emissions:

• Highlighting the steps taken to reduce carbon emissions, he said the rollout of petrol blended with 20 per cent ethanol has been brought down to 2025 from the previous deadline of 2030.
• In this context, according to the Union Minister, the target of 12% ethanol blending has been achieved by October 2023. 5,000 petrol pumps in the country are already selling 20% ethanol.