Indian Oil Corporation is investing over Rs 12,000 crore (Rs 120 billion) in upgrading its seven refineries to produce Euro-III and Euro-IV grade petrol and diesel from April 2010.
"All our refineries are on schedule to meet the Euro-III and Euro-IV deadline," IOC Director (Refineries) B N Bankapur said.
While petrol and diesel meeting the stringent Euro-IV specifications is to be supplied in seven metro cities of Delhi, Mumbai, Chennai, Kolkata, Bangalore, Hyderabad and Ahmedabad from April 1, 2010, Euro-III grade fuel is to be supplied in rest of the country from that date.
Doubts had been expressed about meeting the April 1, 2010 deadline after an industry representation by IOC, Hindustan Petroleum and Bharat Petroleum sought postponement of the schedule for cleaner fuel to 2015.
While Bankapur insisted all of IOC's seven refineries would meet the 2010 deadline, industry sources said its Barauni unit in Bihar and Digboi and Guwahati refineries in Assam faced about six month delay in commissioning facilities to produce Euro-III norm compliant diesel.
This minor delay had led to the company joining HPCL and BPCL in requesting for deferment of the 2010 deadline.
Sources, however, said the petroleum ministry was not inclined to relax the deadline to 2015 and has asked the refiners to expedite upgradation of their units.
Besides the three units of IOC, HPCL's Mumbai and Vizag refineries faced up to two years delay in commissioning facilities to produce Euro-III and Euro-IV grade fuel. Chennai refinery and Numaligarh refinery also faced between six to 10 months' delay.
The three firms, they said, may now seek postponement of the deadline by a shorter two years to April 1, 2012.
IOC, BPCL and HPCL cited cash crunch because of losses on sale of petrol, diesel, domestic LPG and kerosene and wanted more time to make investments in upgrading their refineries to produce Euro-IV grade petrol and diesel.
Production of Euro-IV grade fuel required setting up of hydro-treater plants, and refineries located in crowded cities like Mumbai faced problems acquiring land for the facility, sources said.
In a meeting held to review the fuel quality upgradation projects recently, Petroleum Ministry found that most refinery upgradation projects may be completed by December 2009 or by January-February of 2010.
In view of the progress made by oil PSUs on fuel quality upgradation projects, suggestion of IOC, BPCL, HPCL to approach Supreme Court through the Ministry for relaxation of the effective dates of implementation of Euro-III/IV diesel fuel did not appear convincing, they said.
