ESSAR OIL LIMITED

Quality Update Issue 1 Ver 1 Page 1 of 10

UPGRADATION OF FUEL QUALITY AUTO FUEL POLICY

The Auto Fuel Policy document has been framed by Ministry of Petroleum and Natural Gas with the twin objectives of addressing the growing environmental concerns and providing assured supply of Auto Fuels for compliance by the Oil Industry and the Auto Industry detailing the plans and mandated actions by the Government. This would be achieved thru the following:

Upgradation of quality/specifications of Liquid auto fuels throughout the country in line with vehicular emission norms. The use of CNG/LPG in the cities affected by high vehicular pollution to enable the vehicle owners to have the choice of fuel and technology combination to meet the higher emission norms in such cities. Use of alternate fuel for vehicles. Upgradation in Technology for producing ethanol / bio-fuels from different renewable energy sources and other support through fiscal and financial measures. A road map for implementation has been drawn out by the Ministry by mandating the vehicular emission standards and corresponding fuel specifications without specifying vehicle technology and type of fuel and also use of alternate fuels with appropriate conversion kits. Norms Road map for Regulation/Compliance of Vehicular Emission Norms Area Coverage Timetable for All New Vehicles Including 2 & 3 Wheelers Entire Country Implemented as per road map w.e.f 01.04.2005

BS II emission Norms (Petrol / Diesel Vehicles) BS III emission Norms for @

13 Metros/Mini-Metros/ Major Implemented as per road map w.e.f Cities 01.04.2005 Entire Country w.e.f 01.04.2010 Euro IV equivalent 13 Metros/Mini-Metros/ Major w.e.f 01.04.2010 emission Norms for @ Cities # 4 Metros: Delhi/ NCR, Mumbai, Kolkata and Chennai $ 9 Mini-Metros/Major Cities: Bangalore, Hyderabad, Ahmedabad, Pune, Surat, Kanpur, Agra, Solapur and Lucknow. @Private vehicles, City Public Service Vehicles and City Private Commercial Vehicles (At present stage of development of the infrastructure the committee has not recommend that city public transport use only gaseous or other non-conventional fuels) The introduction of Euro IV emission norms is subject to review based on the assessment of the impact of Bharat Stage-II norms in the entire country and BS-III norms in identified cities. The oil industry, however, is committed for introduction of Euro-IV norms in the year 2010 in line with the Auto Fuel Policy. The Auto Fuel Policy also aims to make the oil companies responsible and accountable for the quality of fuel sold thru its Retail Outlets and also mandated using locks for movement of fuels in all major cities in the country. For further information and queries contact: Technical Services, Essar Oil Ltd (Mkt Div), Essar Technopark, 4th Floor,B Wing, LBS marg, Kurla(W), Mumbai-400070

ESSAR OIL LIMITED

Quality Update Issue 1 Ver 1 Page 2 of 10

UPGRADATION OF FUEL QUALITY AUTO FUEL POLICY

The detailed comparison of specification of Motor Spirit and High Speed Diesel to meet the emission norms is given in Annexures I and II enclosed along with Auto LPG specifications in Annexure III. Actionable Points:

1.

The BS III grade of MS/HSD to be positioned at the depots/supply points feeding the ROs in the 13 Metros/Mini-Metros and Major Cities. 2. Refinery to upgrade manufacture of exclusively BS III grade of MS/HSD only for supply to all the ROs across the country as per schedule of 1.04.2010. 3. The Retail Outlets in these cities should have a clear change over plan by completely emptying out the previous grade. 4. Refinery to upgrade manufacture of exclusively Euro IV equivalent grade of MS/HSD only for supply to all the ROs in the 13 Metro/Mini-Metro/Major cities as per schedule of 1.04.2010. 5. Provision of Pilfer proof locks during movement of product by Tank Trucks. 6. A well defined policy for checking and maintaining Quality of product sold thru Retail Outlets.This policy has been developed and circulated for implementation in the field. 7. Provision of Auto LPG facilities at Existing ROs/Stand alone units subject to availability of space, potential and viability. Implementation of Ethanol Doped MS Programme Government of India Vide Gazette Notification [GSR 618(E)] of 3.9.2002 issued on 12th September, 2002, allowed the doping of Petrol with 5%of anhydrous Ethanol for supply in the 9 sugar producing States with effect from 1st January, 2003 in the 1st phase. However, the programme faced problems on account of high prices of ethanol and its erratic supply. The Ministry has issued a fresh Gazette notification No. 705 (E) dated 27.10.2004, that EBP would be sold in 10 notified states and 3 UTs conditionally if the price of sourcing indigenous ethanol is comparable to the price of indigenous ethanol for alternative uses and the delivery price of the ethanol at that location is comparable to the import parity price of petrol at the same location and the indigenous ethanol industry is able to maintain the availability of ethanol for EBP at such prices. The EBP programme continues to be mandatory, in terms of notification dated 27.10.2004 and as long as the prices of ethanol are competitive and reasonable, and supply of ethanol is adequate, the oil marketing companies would continue to be statutorily required to lift the same and supply the ethanol blended petrol in notified areas. Recently, the MOP& NG has announced introduction of EBP programme to all States in the country except J&K, NE and the islands by 1st Nov 2006 and also has mandated introduction of 10% blending of Ethanol by Oct 2008. However, the prices at which companies have contracted with Oil Companies are not sustainable as the cost of molasses has gone up by 40%. Govt is likely to review the availability after the crushing season commences. Hence the mandate of 5% Ethanol continues till further advice from the Govt. Except for States of West Bengal, Orissa and Chattisgarh all other 17 states have been taken up by the PSU Oil Companies for implementation and the tenders have been finalized. Actionable Points:

For further information and queries contact:

Technical Services, Essar Oil Ltd (Mkt Div), Essar Technopark, 4th Floor,B Wing, LBS marg, Kurla(W), Mumbai-400070

ESSAR OIL LIMITED

Quality Update Issue 1 Ver 1 Page 3 of 10

UPGRADATION OF FUEL QUALITY AUTO FUEL POLICY

1.

2. 3. 4. 5.

Identified supply points, mainly at RMT Vadinar, need to be provided with separate tankage for storage of Denatured Anhydrous Ethanol equivalent to 15/30 days requirement so as to meet the blending norms of 10% along with necessary Silica Gel traps in the vents. To ensure uniform doping, facilities may be provided for mixing 10% v/v in each compartment of the Tank Truck. The parties have already been contacted for supply of Anhydrous ethanol as per specifications Of Denatured Anhydrous Ethanol Based on IS 15464:2004 (Annexure V) Understand that all statutory approvals from Excise, Sales tax, Explosives Dept for storage and Blending at RMT Vadinar have already been obtained and provision made in the gantries for auto doping of ethanol. The Quality Checks required for day to day Operations and Safety for Ethanol Doped Motor Gasoline has been developed. All supplies of BSII and BS III grades will be doped with 10% v/v Denatured Anhydrous Ethanol wef 1.10.2008.

Implementation of Bio Diesel Programme Bio-diesel is chemically treated vegetable oil/ animal fat which can be mixed with conventional diesel to be used as transport fuel. The R&D studies indicates that a bio-diesel/diesel blend results in a fuel that is non toxic, bio-degradable and non-flammable with a very high flash point. It enhances the life of the engine and also results in comparatively lesser pollution. Under the MOP&NG directives, experimental pilot projects have been initiated with Non-edible oil blends with diesel in Buses and Rail Locomotives. BIS has amended the specifications of diesel to permit blending of bio-diesel in it. BIS is also working on the specifications of bio-diesel for use as auto-fuel. The National Mission on Bio-Diesel was launched in 2003 is to be implemented in Phases: Phase I by 2006-07 demonstration project and self sustaining expansion in Phase II. The Bio-Diesel purchase policy (Rs. 25/Lit incl of taxes and duties and transportation costs) issued on 1st Jan 2006 . The National Bio-fuel policy envisages 5% blend by 2012 and 20% by 2017. This policy states that the price of Bio-diesel would be matched with diesel price, after excise duty at the depots of Oil Companies. Excise and VAT exemptions to blended part of Bio Diesel would be available for 5 years. The National Policy on bio fuels has been approved by the Cabinet on 11.9.2008. Ministry of Rural Development is the nodal Ministry for ensuring availability of Bio Fuels for blending. A National Bio Fuel Development board is also proposed to be created to carry forward the targeted objectives. Actionable Points:

1.
2.

The source for supplies of Bio-Diesel needs to be identified so as to make available suitable quantities of Bio-Diesel for blending to meet the statutory requirement of 20% Blend by 2017. Facilities need to be planned for storage of Bio-Diesel for Blending at all Supply points.

For further information and queries contact:

Technical Services, Essar Oil Ltd (Mkt Div), Essar Technopark, 4th Floor,B Wing, LBS marg, Kurla(W), Mumbai-400070

ESSAR OIL LIMITED

Quality Update Issue 1 Ver 1 Page 4 of 10

UPGRADATION OF FUEL QUALITY AUTO FUEL POLICY

Motor Spirit Specifications to meet BS II, III and Equivalent Euro IV Emission Norms- Annexure I Sl. 1 2 3 4 Characteristic Grade Colour, Visual Density @ 15oC, Kg/m3 Distillation : Recovery up to 70oC (E-70), % by Vol. Recovery up to 100oC(E100), % by Vol. Recovery up to 150oC(E150), % by Vol. Min. Recovery up to 180oC(E180), % by Vol. Min Final Boiling Point, oC, Max. Residue, % by Vol. Max. Research Octane Number (RON), Min. Motor Octane Number (MON), Min. Anti-Knock Index,(AKI), Min Existent Gum, g/m3, Max. Gum content, mg/100 ml (solvent washed) Potential Gum (*1), g/m3 max Sulphur, Total Percent by mass, Max. Lead Content (as Pb ), g/l, Max Reid Vapour Pressure (RVP) (*3) at 38oC kPa Vapour Lock Index (VLI)(VLI = 10 RVP + 7 E 70) (*3), Max. Summer (*5) Other months BS II MS 88 MS 93 Orange Red 710 770 710 770 10 45 40 70 90 215 2 88 84 40 50 0.05 0.013 35 60 (35 67) 10 45 40 70 90 215 2 93 88 40 50 0.05 0.013 35 60 (35 67) Requirements BS III MS 91 MS 95 orange Red 720 775 720 775

Euro IV equivalent MS 91 MS 95 orange Red 720 775 720 775

10 45 40 70 75 210 2 91 81 40 150 mg/Kg 0.005 60 Max. (67) Max.

10 45 40 70 75 210 2 95 85 40 150 mg/Kg 0.005 60 Max. (67) Max.

10 45 40 70 75 210 2 91 81 5 50 mg/Kg 0.005 60 Max. (67) Max.

10 45 40 70 75 210 2 95 85 -5 50 mg/Kg 0.005 60 Max. (67) Max.

5 6 7 8

9 10 11 12 13

750 (900) 950 (1050)

750 (900) 950 (1050)

750 (900) 950 (1050)

750 (900) 950 (1050)

750(900) 950 (1050)

750 (900) 950 (1050)

For further information and queries contact:

Technical Services, Essar Oil Ltd (Mkt Div), Essar Technopark, 4th Floor,B Wing, LBS marg, Kurla(W), Mumbai-400070

3 (A) 3 (A) 1 1 1 (B) 1 1 (B) 5 (Rest of 5 (Rest ESSAR OIL LIMITED Quality Updateof Issue 1 Ver 1 Country) Country) 15 Copper Strip Corrosion, for3 Not worse Not Not Not Class 1 hrs at 50oC, Max. OF FUEL QUALITY 1 than No. AUTO worse POLICY worse worse UPGRADATION FUEL Page 5 of 10 than No. than No. than No. 1 1 1 16 Water tolerance of Gasoline - alcohol Blends, Temp. for phase separation, oC, Max. 14 Benzene content, % by Vol. Max. Summer Winter (*6) Engine intake cleanliness (*7) 10 0 Report MFA used 10 0 Report MFA used 10 0 Report MFA used 21 360 42 2.7 10 0 Report MFA used 18 360 42 2.7 10 0 Report MFA used 21 360 35 2.7

1 Class 1

17 18 19 20 21 22

system

Olefin Content %Vol. Max. Oxidation Stability, Minutes, Min Aromatics Content %Vol. Max. Oxygen Content, percent by Mass, Max.. Oxygenates % By Vol. Max. a) Methanol b) Ethanol (*8) c) Iso-Propyl Alcohol d) Iso Butyl Alcohol e) Tertiary Butyl Alcohol f) Ethers containining 5 or more C atoms per molecule g) Others Oxygenates(*9)

10 0 Report MFA used 18 360 35 2.7

Nil 5 10 10 7 15 8

Nil 5 10 10 7 15 8

Nil 5 10 10 7 15 8

Nil 5 10 10 7 15 8

3 5 10 10 7 15 8

3 5 10 10 7 15 8

Note To be carried out at the refinery end only, and the limit for the test is meant for products prior to addition of multiple-functional additives (MFA), if used. However, the use of MFA does not exempt the manufacturer from meeting this requirement prior to addition of additives. This test shall be carried out on the Gasoline before addition of Multifunctional detergent / dispersants additives, as these may interfere with the test. Limits given in ( ) shall be applicable to 5 % (v/v) ethanol ethanol blended gasoline only. Those areas where blending of ethanol in gasoline is compulsory, the dosage of ethanol shall be 4.75 +/- 0.25 (v/v). For the gasoline-alcohol blends, the dry vapour test method given in Annex A shall be followed. Winter shall be the period from November to February in Central and Northern States of India (both months inclusive) and rest of months of the year shall be called as summer. In winter it is expected that temperature may be lower than 0oC in the northern hilly region and hence phase separation shall not take place till -10oC. Use of multi-functional additive (MFA) is a requirement for assuring adequate fuel system and intake system cleanliness performance in engines. Refiners/Marketers of motor gasoline have to ensure the MFA** has proper credentials from internationally accepted test laboratories/authorities, of having passed a minimum of one of the tests in each of the two categories of deposit control performance indicated below:Deposit Type Test No. Test Equipment Test Method

*1. *2. *3. *4. *5 *6. *7

Pass Limit (Average IVD weight) For further information and queries contact: Technical Services, a) Intake Valve Deposit (IVD) 1 BMW IVD Test ASTM D: 100 mg/value, Essar Oil Ltd (Mkt Div), 5500-97 Max. Essar Technopark, 4th Floor,B Wing, LBS marg, Kurla(W), Mumbai-400070 2 MB M102E IVD CEC F-05-A- 50 mg/value, Max. 93 3 FORD 2.3 Litre ASTM D : 90 mg / value, IVD 6201 Max.

ESSAR OIL LIMITED

Quality Update Issue 1 Ver 1 Page 6 of 10

UPGRADATION OF FUEL QUALITY AUTO FUEL POLICY

Diesel Specifications to meet Bharat Stage II, III and Euro IV Emission Norms - Annexure II Sr No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Characteristics Acidity, Inorganic Acidity, Total, mg of KOH/g, Max. Ash, % by Mass, Max. Carbon Residue (Ramsbottom) on 10 percent residue 1),, Percent by mass, Max. Total contamination, mg/ kg Total Sulphur % by mass Total Sulphur 8) , mg/kg, Max Water Content, percent (v/v) Water Content, mg / kg, max. Sediment, percent by mass, Max Cetane Number 2), Minb) Cetane Index 2), Minb) Density @ 15 oC 6) , Kg/m3 Pour Point,
4) o

BS II Nil 0.2 0.01 0.3 0.05 0.05 0.05 48 3) or 46 3) 820 860 winter summer 3oC 15oC 2.0 to 5.0 6 18 Not worse than No.1 85 95 35 66 1.5

BS III Nil 0.2 0.01 0.3 (without additives) 24 350 200 51 3) and 46 3) 820 845 3oC 15oC 2.0 to 4.5 6 18 Class 1

Euro IV Nil 0.2 0.01 0.3 (without additives) 24 50 200 51 3) and 46 3) 820 845 3oC 15oC 2.0 to 4.5 6 18 Class 1

C, Max

15 16

Kinematic Viscosity, cSt at 40 oC Cold Filter Plugging Point, (CFPP) 4) , Max winter summer Copper Strip Corrosion for 3 hrs @ 100 oC Distillation, percent (v/v), recovered: at 350C, Min at 360C, Min at 370C, Min

17

95 a

95a 35 66 25 11 -

18

Flash Point * : Abel , C , Min. Pensky Martens Closed Cup 5) , oC, Min. Oxidation Stability, g/m3, Max. Polycyclic aromatic hydrocarbon (PAH), percent by mass, Max. Total Sediments 10) mg per 100 ml, Max. 35 66 25 11 -

19 20 21

For further information and queries contact:

Technical Services, Essar Oil Ltd (Mkt Div), Essar Technopark, 4th Floor,B Wing, LBS marg, Kurla(W), Mumbai-400070

ESSAR OIL LIMITED

Quality Update Issue 1 Ver 1 Page 7 of 10

UPGRADATION OF FUEL QUALITY AUTO FUEL POLICY

22 23

Lubricity corrected wear scar diameter (wsd 1.4) at 60C, micron, Max. Oxygen content 11) percent by mass, Max.

460 0.6

460 0.6

460 0.6

1) This limit is applicable prior to addition of ignition improvers, if used. In case a value exceeding the limit is obtained on finished fuels in the market, ASTM D 4046 / ISO 13759 shall be used to establish the presence of nitrate containing compound. In such case the present limit for carbon residue cannot be applied. However, the use of Ignition Improvers does not exempt the manufacturer from meeting this requirement prior to the addition of additives. 2) Fuel meant for vehicle meeting Bharat Stage II emission norms is required to meet either of these two parameters. 3) For fuel processed from Assam crude, cetane number and cetane index is relaxed by 3 units.

4) Winter shall be the period from November to February in Central and Northern plains of India (both months inclusive) and rest of the months of the year shall be called as summer. 5) Applicable for Naval applications and fishing vessels requiring high flash HSD. 6) For fuel processed from Assam crude, the density range is relaxed to 820-870 and 820-855 for Bharat Stage II and Bharat Stage III grade respectively. 7) In case of dispute (P: 32) shall be the referee test method. 8) For HSD supplied to Indian Navy, the limit of sulphur shall be in agreement between the buyer and the supplier. 9) In case of dispute, ASTM D-4294 shall be the referee test method. 10) This test shall be carried out only at the refinery or manufacturer's end. As an alternative, the test method given in Annex A can also be used with a limit of 1.6 mg / 100ml. In case of dispute ASTM D 2274 shall be the referee test method. 11) Shall be applicable only for HSD blended with 5 percent (v/v) Bio-diesel and the limit shall proportionately vary as and when the different blending percent of bio-diesel is permitted. * Under review. a) The density and 95% recovery temperature limits shall be company pool average. However, all samples shall meet density @ 15 deg C limit of 820-860 kg/m3 and 95% min distillation recovery at 370 Deg C b) For Diesel processed from Assam Crude, relaxation of CN and CI by 3 units shall be applicable as provided in the present BIS specification

Specifications for Liquified Petroleum Gases for Automotive Purposes Annexure III

For further information and queries contact:

Technical Services, Essar Oil Ltd (Mkt Div), Essar Technopark, 4th Floor,B Wing, LBS marg, Kurla(W), Mumbai-400070

ESSAR OIL LIMITED

Quality Update Issue 1 Ver 1 Page 8 of 10

UPGRADATION OF FUEL QUALITY AUTO FUEL POLICY

SL No 1 2 3 4 5 6 7 8 9

CHARACTERISTICS Vapour pressure at 40o C, Min Max C5 Hydrocarbons and heavier, Max Dienes (as 1:3 Butadiene), Max Total volatile sulphur (After stanching), Max Copper strip corrosion at 40o C for 1 hour, Max Hydrogen Sulphide Evaporation residue, Max Free water content Motor octane number (MON), Min

UNIT KPa, gauge

Method of Test, Ref to n ISO 4256

Requirement for Auto LPG 520 (Note 2) 1050 2.0 0.5 150 Class 1 Pass the test 100 Nil 88 Unpleasant and distinctive down to 20 percent lower explosive limit (LEL)

mole percent mole percent Ppm mg/kg

ASTM D 2163 ISO 7941 ASTM D 3246 ISO 6251 ISO 8819 ISO 13757 ASTM E 700 (Note 3) ISO 7941 +Annex A (Notes 4 and 5)

10

Odour

NOTES:

1. Vapour pressure may be determined at any other temperature and converted to 40o C by means of
suitable vapour pressure-temperature graph. The same can also be determined by analyzing the gas by means of a gas chromatograph and then using the composition, the vapour pressure can be calculated at 40o C from the standard values of vapour pressures at various temperatures. In winter, the gauge vapour pressure requirement shall be minimum 700 kPa at 40o C. Winter period shall be from 1st November to 15th February. The water content shall be determined at the Refinery/first dispatching location. Product shall contain 20 ppm, Min, ethyl mercaptan at the first dispatching location to ensure the detection of leakage, by odour. To detect the odour the following procedures shall be adopted: 5ml Doctor Solution + 8ml Iso Octane + Pinch of Flower Sulphur in 25 ml stoppered cylinder. Shake and add 2 ml LPG (Aq.) Shake slowly by releasing pressure. Odour is adequate if sulphur turns yellowish-brown.

2.
3.

4.
5. a) b) c) d)

IS 1448 [P : 75]; Odour test method is also acceptable as an alternate method.

For further information and queries contact:

Technical Services, Essar Oil Ltd (Mkt Div), Essar Technopark, 4th Floor,B Wing, LBS marg, Kurla(W), Mumbai-400070

ESSAR OIL LIMITED

Quality Update Issue 1 Ver 1 Page 9 of 10

UPGRADATION OF FUEL QUALITY AUTO FUEL POLICY

ISO/ASTM Test methods shall be followed till [P:] Series of IS 1448 methods are published.

For further information and queries contact:

Technical Services, Essar Oil Ltd (Mkt Div), Essar Technopark, 4th Floor,B Wing, LBS marg, Kurla(W), Mumbai-400070

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Quality Update Issue 1 Ver 1 Page 10 of 10

UPGRADATION OF FUEL QUALITY AUTO FUEL POLICY

Industry Specifications of Denatured Anhydrous Ethanol - IS 15464:2004 Annexure IV

A)

Specifications For Anhydrous Ethanol: S.N 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Characteristics Relative density at 15.6cC / 15.6cC max. Ethanol content % by volume at 15.6cC / 15.6cC min. Miscibility with water Alkalinity Acidity (as CH3COOH), mg/l, Max. Residue on evaporation, percent by mass, Max. Aldehyde content (as CH3CHO) mg / l , Max Copper , mg/kg,Max Conductivity , s/m,Max Methyl alcohol , mg/litre , Max Appearance Industry Tender Specification 0.7956 99.6 Miscible Nil 30 0.005 60 0.1 300 300 Clear & bright and free from suspended matter Methods of Test, Refer to Annex of IS 15464 : 2004 A B C D D E F G H J Visual

B)

Denaturants:

1. The denaturant should be added with Ethanol in suitable dosage as per IS: 4117 in line with IS-15464 and as per prescribed Excise regulation from time to time conforming to the automotive fuel requirements. Denaturants may be considered as a part of Ethanol and component of the fuel. Ethanol should not have more than 0.4% max impurities including permitted denaturants. These denaturants should not have detrimental effect on specification and stability of Motor Gasoline. 2. Some of the Prohibited denaturants for Ethanol that cannot be used are Pyrroles, Methanol, Turpentine, Ketones, Tar, Benzene, Organo-metallic compounds.
3. The denaturants should be pre-mixed at Ethanol manufacturer end before transporting the Ethanol to Oil Company premises. The name and dosage of the denaturants used should be clearly mentioned on the delivery documents duly endorsed by State Excise Authorities.

For further information and queries contact:

Technical Services, Essar Oil Ltd (Mkt Div), Essar Technopark, 4th Floor,B Wing, LBS marg, Kurla(W), Mumbai-400070