By Rakteem Katakey and Natalie Obiko Pearson Dec. 15 (Bloomberg) -- Indian Oil Corp., the nation’s second-biggest refiner, and its state-run rivals are spending 235 billion rupees ($5 billion) to produce cleaner fuels and meet stricter emissions guidelines. Indian Oil allocated 115 billion rupees to upgrade its plants, Director of Refineries Basavaraj Ningappa Bankapur said in an interview in New Delhi yesterday. Bharat Petroleum Corp. and Hindustan Petroleum Corp., the second and third-biggest state refiners, are spending 50 billion and 70 billion rupees respectively, company officials said yesterday. New emissions standards for gasoline and diesel to be introduced April 1 will make it compulsory for refiners to sell cleaner-burning fuels. India, the world’s second-fastest growing major economy, aims to cut emissions as it joins 191 other nations in climate-change negotiations in Copenhagen. “Introducing cleaner fuels will be an absolutely critical step for India to help limit its future emissions,” said Shebonti Ray Dadwal, a research fellow on energy security at the Institute for Defence Studies & Analyses in New Delhi. “The government will likely implement the new standards stringently in order to help meet the new targets it announced for Copenhagen.” Emission Intensity India offered to voluntarily reduce the amount of carbon emissions per unit of gross domestic product after similar pledges from the U.S. and China. Asia’s third-biggest energy consumer can reduce its emission intensity by as much as 25 percent from 2005 to 2020 through forestry measures and by becoming more energy efficient, Environment Minister Jairam Ramesh said on Dec. 3. New Delhi-based Indian Oil may start producing low sulfur gasoline and diesel at its 240,000 barrel-a-day refinery at Panipat in the northern state of Haryana later this month. It will then do the same at the 160,000 barrel-a-day facility at Mathura in Uttar Pradesh in January, Bankapur said. “We will be ready to start producing clean fuels by the target date,” he said. “We still have three months to go.” Indian Oil has gained 51 percent in Mumbai this year, lagging behind the 78 percent increase in the Bombay Stock Exchange’s Sensitive Index. The stock declined 1.2 percent to 320.60 rupees at 10:02 a.m. compared with a 0.4 percent gain in the main index. Bharat Petroleum fell 0.7 percent and Hindustan Petroleum dropped 0.8 percent. Fuel Standards From April, it will be compulsory for refiners in India to sell fuels that adhere to Bharat Stage III and IV emission standards, akin to the European Union’s Euro III and IV requirements. The Euro IV standard specifies a maximum of 50 parts per million of sulfur in gasoline and diesel which will be sold in 11 cities including New Delhi and Mumbai from April 1, according to the United Nations Environment Program Web site. Fuels with a maximum of 350 parts per million of sulfur will be sold in the rest of the country. Bharat Petroleum disclosed its spending plans in an e- mailed statement. Hindustan Petroleum’s budget for producing cleaner fuels was confirmed by B. Mukherjee, its director of finance. The companies didn’t say when they would complete their spending program. To contact the reporters on this story: Rakteem Katakey in New Delhi at rkatakey@bloomberg.net; Natalie Obiko Pearson in Mumbai npearson7@bloomberg.net

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