Oil firms urge motorists to brace for Euro IV

Motorists must be prepared to pay a premium for cleaner-burning fuel under a government move to fast track the implementation of higher emissions standards, industry stakeholders said.

Latest industry data showed that Mean of Platts Singapore benchmark prices for Euro IV fuels were more expensive by a range of $0.85 to $1 per barrel. Depending on the peso-dollar exchange rate, this may result in about 30-centavo price difference.

Eastern Petroleum Corp. president Fer Martinez said there would only be a “slight” effect at the retail level but the benefits of cleaner emissions would outweigh the perceived price impact.

The Department of Energy has said that Euro IV was expected to be more expensive once available at the pump.

“Why Euro IV? Because we want a cleaner air. If you want a better quality of life, there is a cost to that,” Energy Undersecretary Zenaida Monsada said in an earlier interview.

Some stakeholders are also anticipating challenges due to the Department of Energy’s order to advance the implementation of the program to make Euro IV fuels available.

Originally, Euro IV fuels and cars would be introduced in January 2016 but the DENR wants the fuels made available earlier or by July 2015.

The order generated mixed reactions among oil firms, with some supporting its early implementation while the others do not.

So far, no one has filed an appeal to keep the January 2016 implementation schedule, but sources said there might be a tight supply situation since not all firms were ready to provide the products at the retail level nationwide.

This situation may also drive prices up, industry observers said.

“We’re not making an appeal since January is the mandatory deadline as per DOE and we’re the ones who have pushed for it since four years ago. The cost difference is minimal especially in the light of the 40-percent decline in oil prices over the last seven months,” Martinez said.

Martinez said Eastern Petroleum had introduced Euro IV diesel in 2012 and have been advocating the early implementation of the emission standards nationwide.

Phoenix Petroleum spokesman Raymond Zorilla said the company would meet the January 2016 implementation. But since importation contracts for Euro IV will only start in October this year, the adjustment in the deadline would make it difficult for the company to comply, he said.

“Aside from the supply issue, we have also current/active contracts with different industrial customers to supply ADO (automotive diesel oil) until end of the year. Since Euro IV fuels are more expensive than Euro II we may incur losses due to the price differential,” Zorilla said.

The Philippines is moving from the current Euro II standards to Euro IV, which is part of the emission standards set by the European countries which call for the reduction of the sulfur content of fuels.

Under Euro II, the acceptable limit for sulfur content in gasoline and diesel is 500 parts per million (ppm), a measure for particulate matter. Under Euro IV, this will be reduced to 50 ppm.

Benzene in gasoline is 1 percent by volume under Euro IV compared to 5 percent for Euro II fuel. Benzene is a liquid hydrocarbon present in petroleum and in coal tar.