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Government suspends implementation of new sulphur levels for petroleum products

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Importers are now required to bring in products with lower sulphur levels of 50 PPM
FILE PHOTO – A worker fills a tank with subsidized fuel at a fuel station in Jakarta April 18, 2013. REUTERS/Beawiharta

Government has suspended the implementation of new sulphur levels for petroleum products.

The National Petroleum Authority (NPA) from the beginning of this month started implementing the new requirement after pressure from some interest groups, because it is said to be injurious to human health and vehicle engines.


This meant that importers are now required to bring in products with lower sulphur levels of 50 PPM, instead of the 500 and 1000 PPMs.

Energy Minister Boakye Agyako told JoyBusiness the action had been influenced by the cost of implementing this policy and some industry concerns.

Mr. Agyako said, “You don’t want to introduce a policy where there are major concerns and if you do the social cost benefit analysis you would realized that the externalities of these cost clearly overwhelm any benefits or savings in terms of the pricing.”


He said, “Our calculation is that if we made it even across board it could only up price by about one and half percent.”

“But who is calculating the cost of externalities, environment, health and all of that, so we want to look at it all over again, engage people to understand why there is the need to do this, get their fuller buy in before we move on,” he said.

Mr. Agyako said, “At the end of the day, when people come to a fuller understanding it is always better. Secondly, every change involves losers and gainers.”


He said, “We haven’t fix a date urged it in stone but the engagements and the reviews are going on.”

“Yes we put it on hold to review, look at the concerns and also recalculate some of the issues that are at stake,” he said.

It is not clear for now how this would impact on the operations of some importers and traders of petroleum products.

This is because JOYBUSINESS understands that some oil marketing firms have already made their orders to bring in these products, whiles others stated importing products with the new levels in July.