It must be noted that our country is dependent on imported crude to meet it’s requirement of lubricating oils as all indigenous crude oils are wax bearing and hence not suitable for manufacture of lubricating oils.

Industry would come to grinding halt without lubricating oil. It is an essential commodity that keeps the wheels of industry moving.  At the same time generated used oil can have a devastating effect on the environment if not handled properly.  Just as we are required to handle sewage, wastewater, garbage etc, we cannot ignore and allow indiscriminate disposal of used lubricating oil, which is what is happening now a day in India.  Used lubricating oil if thrown on land, not a blade of grass would grow and if let into water, marine life would be endangered. To recycle used lubricating oil is not only an intelligent option for any country, but more so for India, as it would conserve both the natural resource as well as foreign exchange.  To that extent, it would also make us self sufficient in Lube oil.

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In 1979 the first Indian Standard Specification was drawn for Re-refined Engine lubricating oil.  It is a historical fact that re-refined engine lubricating oil was the first Engine Oil carrying Indian Standard’s Mark.  The latest specification of Bureau of Indian Standards on Automotive Internal Combustion lubricating oil, permits wholly re-refined oil or blend with virgin stock in any percentage in manufacture of Automotive engine oil.

Advanced countries of the world has given all required encouragement to re-refining industry. France, Germany gives subsidy on every litre of used oil re-refined. In America, many states have set up system, whereby, same way as refuse is collected in big cities by garbage trucks, a tanker goes out collecting used oil from drums placed at every street corner to receive used oil stored there by the Motorist. Owners usually purchase a can of engine oil from super market and change the oil himself. These collectors of used oil in America are called “Roadside Patriots”.

South Africa, due to it’s racial policy, encouraged re-refining industry, as they were apprehensive of oil blockade by the oil producing countries.  In 1942, they laid down first ever specification for re-refined Engine Lubricating oil.  The oil prices in those days were so negligible that when the re-refiners confronted the administration with the problem of finding market for their re-refined oil, the administration decided to have all the non-combat government vehicles run on re-refined lubricating oils.  That is the nationalist government approach worth emulating for any country that has to depend on import of Crude Oil.  

Ministry of Petroleum’s Lubricating Oils & Greases Order 1987.
In the year 1987, in order to reduce consumption & also save forex outgo, Ministry of Petroleum brought manufacturing, marketing, dealing in lubricating oil under Essential Commodity Act.  Nobody could deal in oil without valid licence.  Unfortunately, the order did not cover the National Oil Companies and minor Oil Companies like Castrol, Petrosil now Pennzoil and Tide Water. This came in handy for those who did not want to fall in line and obtained stay order from state high courts, the order being discriminatory. The Ministry’s order was rendered ineffective. The officers of Petroleum Ministry tried to club all the stay orders to remove the lacuna. But due to unstable governments at the centre since 1995,
this matter never received due consideration.

All these has made this important order redundant without giving thought to it’s importance in national context.  Unfortunately for India, the attitude of the Technical Division of National Oil Companies has always been negative towards re-refiners as if the re-refiners would snatch their business cake. On their advise Ministry of Environment & Forest has become very active and wants to stop the re-refining industry, as most of the units are based on the conventional acid clay process, being low capital investment project. The policy makers have overlooked very important aspect in taking this decision. The pollution caused by not recycling such a huge quantify of used lubricating oil generated in our country, would have far more devastating effect on environment then by Recycling these used oils by re-refiners.  Moreover, the field is now wide open for the KADHAIWALAS (hand processors) as they have doubled their activities.  They do not require licence, nor pay sales tax, excise duty or income tax.  One more angle is the incalculable damage their spurious product would inflict on the industrial machinery & environment. With the rise in the price of Fuel oils, used Lubricating oil are burnt as fuel in the boilers.

Excise Duty.
Following Liberalisation policy and the budget of 1993, Finance Minister decided to levy excise duty on re-refined oil without any Modvat on used lubricating oil. You had so very kindly lead our delegation to meet Shri. Manmohan Singh in 1993, but it was a lost case. Fresh lubricating oil is liable to excise duty when sold. After use it remains lubricating oil albeit in used form. It stands to no logic how Re-refined oil could be subjected  to excise duty over and over again just because it is cleaned. After re-refining the used lubricating oil, it is still a lubricating oil and it’s use is also the same All consumer industry are also very much agitated over the repeated payment of excise duty on their own re-refined lubricating oils and that too without availing any Modvat. It is only due to high cost of lubricating oil that they grudgingly pay the Excise Duty and continue to have their own used oil re-refined. As if all this was not enough the Finance Minister went on to reduce duty on imported oil, which lands cheaper than the prevailing rate of re-refined oil.

In order to encourage re-refined lubricating oils, Canada permits “Eco label” mark on every pack of lubricating oil that has minimum 15 Percent of re-refined oil, The Eco conscious customers would look for green label before they purchase any oil. It is not that we do not have Eco-friendly (acid free) process, which requires heavy capital outlay. For want of assurance and positive support from the government, no businessman would invest in such a project.

With this scenario, most of the re-refiners have either sold their unit to some other industry or closed their unit.  There are very few re-refiners who have managed to keep their nose above the water level by taking up job work of re-refining used lubricating for consumer industry.  They are surviving in the fond hope of change for better climate.

Based on the opinion given by the technical division of the National Oil Companies,  the used lubricating oil is now classified in the Category of hazardous goods by both the Ministry of commerce as well as Ministry of Environment. It is beyond comprehension  what makes the used oil hazardous when it is handled by workers of service station with naked hand.  In contrast, National Laboratories have certified that the used lubricating oil tested by them is not hazardous at all.  This has confused the concerned officers of government departments.

In order to encourage re-refining of used lubricating oil industry the government has to address to
the following points with all sincerity.  

1          Re-refining of used lubricating oil does not amount to manufacture, hence is not liable to excise duty.  

2.         The lubricating oils and greases (processing, supply and distribution regulation order 1987), under essential commodity act should be applied stringently with necessary amendments to remove the lacunas
in the order so that court would not grant stay order.

3.         Bureau of Indian Standards mark be made compulsory for all Lubricating Oils. All manufacturers of
Lubricating Oils be required to blend 5% re-refined lubricating oils in the manufacture of all finished Lubricating oils.  All such blended oils be granted “Eco” label mark as well as initiate consumer consciousness. Alternately all non combat government vehicles (State Transports) be made to run only re-refined Engine lubricating oils carrying Bureau of Indian Standard’s  mark.

4.         All large consumers of lubricating oils must be made accountable for the disposal of their used lubricating oils to licensed re-refiners only.

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