100 Octane Fuel

Author: Karthik Sivamani

Indian Oil Corporation Limited (IOCL) launched the nation’s first 100 Octane fuel at the beginning of the month. The fuel would cost approximately Rs. 160 per litre in Delhi. This is a niche market across the globe supplying only to premium luxury and sports car. This launch has brought India to join a select league of nations globally that have such superior quality fuel. This fuel is available only across 6 countries including USA, Germany, Greece, Indonesia, Malaysia and Israel.

Octane ratings are measures of fuel stability. It is a measure of a fuel's ability to avoid knock. Knock occurs when fuel is prematurely ignited in the engine's cylinder, which degrades efficiency and can be damaging to the engine. The higher the octane number, the more resistant the petrol mixture is to knock. Currently, the regular petrol marketed in India has a rating of 91 octane.

IOC has plans to launch the 100 Octane premium grade petrol in 15 cities across the country in two phases. The first phase which kicked off on December 1 has seen the fuel made available in Delhi, Gurgaon, Noida, Agra, Jaipur, Chandigarh, Ludhiana, Mumbai, Pune and Ahmedabad. In the second phase, the availability of this 100 Octane petrol will be extended to Chennai, Bangalore, Hyderabad, Kolkata and Bhubaneswar by January 2021. These cities have been selected basis their aspirational demographics and availability of high-end vehicles in these cities.

What Benefits can we as a consumer expect from this 100 Octane fuel:

Higher octane doesn’t necessarily mean higher performance. Fuel with a higher octane rating can stand up to higher compression before it detonates. Only if your vehicle is having a higher compression ratio or a turbocharger, you can get the benefits from a higher octane fuel. But in some cases, high-octane fuel can help you save costs.

For an environmentally friendly approach, high octane fuel has been proven to have fewer pollutants.

Benefits of High Octane Fuel for Vehicle Manufacturers

Greenhouse gas (GHG) reductions–Many automotive manufacturers are taxed for their greenhouse gas emissions. Since vehicles manufactured to use high octane petrol have lower emissions than vehicles that use lower octane fuel, the vehicle manufacturers can attract tax remissions from the tax authorities for making the high-performance engines.

Increased torque in performance applications—All manufacturers design vehicles in such a way as to offer incremental improvements in performance over previous versions. The combination of premium fuel and advanced engine technology is a win-win for both manufacturers and customers.

Benefits of High Octane Fuel to Fuel Retailers

Fetch higher margins in the less price-competitive market—Premium fuel is used in high-performance cars who may be less price sensitive to fuel costs and this leads to better margins for retailers.

Benefits of High Octane Fuel to Fuel Producers

Economies of scale—For petroleum manufacturers, higher octane fuels because of their niche segment will attract better economies of scale.