Fuel Additives Regulation and Declining Crude Quality Drive Fuel Additives Market

Editor: Dominik Stephan

New analysis from Frost & Sullivan, Strategic Analysis of the Indian Fuel Additive Market, finds that the market earned revenues of US $49.2 million in 2013 and estimates this to reach $62.4 million in 2017.

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Tightening Regulatory Environment and the Declining Quality of Crude Oil Drive the Fuel Additives Market in India
Tightening Regulatory Environment and the Declining Quality of Crude Oil Drive the Fuel Additives Market in India
(Picture: PROCESS)

Mumbai/India – This is against a global market of US $3.5 billion in 2012 indicating a market of low maturity where about 90 percent of additives are added at the refinery level. With the mandate to follow Bharat Stage emission standards, the use of fuel additives will become increasingly imperative. Additives for petrol will witness a slightly faster growth than diesel due to the marginally higher demand for petrol vehicles and also the fact that a major portion of diesel vehicles are used for commercial applications where lessening costs are more important than marginal improvement in the vehicle efficiency.

According to the Frost & Sullivan’s Chemicals, Materials & Foods Research Analyst, escalating crude oil prices and availability issues due to political unrest in the Middle East are forcing refiners to process heavier and sour crude. This is increasing the demand for additives to enable conforming to fuel regulatory standards.

The Benefits of Fuel Additives

While it offers many benefits such as cleaner engines, lower pollution, improved engine ignition, prevents gumming and icing, higher fuel efficiency etc., the additional cost fuel additives attract over normal fuel is a deterrent in the cost-sensitive Indian market. Cheaper fuel options such as liquefied petroleum gas (LPG) and compressed natural gas (CNG) also limit the adoption of fuel additives. Awareness about fuel additives is quite low in India as evident by the fact that only oil companies use it and its non-availability as a retail product unlike in the developed countries.

The analyst further opines that communicating the need for and the long-term advantages of fuel additives will go a long way in supporting the uptake of fuel. Customers with higher spending power and environmental consciousness will be open to spend a little more once they are aware of what they get in return.