As the number of vehicles in the world grows, boosted by surging numbers in Asia, several nations have stepped up the adoption of standards to cap sulphur emissions in recent years, including China, India and Thailand.

With the new directive, Singapore will be on par in terms of sulphur standards with Japan, South Korea and Australia for diesel but still lag these countries for gasoline.

Refineries in Singapore will have to supply cars and industries diesel with a sulphur content of less than 10 parts per million (ppm) from the current minimum of 50 ppm by July next year.

For gasoline, they will have to supply less than 50 ppm sulphur by October 2013, from the current minimum sulphur content of 500 ppm.

The environment agency said in a release late on Thursday that it will work with refineries to improve their processes and decrease their sulphur dioxide emissions.

"Power stations are also working towards cleaner fuels for their energy needs in order to lower their sulphur dioxide emissions," the agency said. "As the power stations and industries switch to the use of cleaner fuels to reduce sulphur dioxide, there will also be a reduction in other pollutants."

Currently, Singapore consumes about 23,000 barrels per day of gasoline and about 40,000 barrels per day of road diesel, an industry source said.

Refineries in Singapore are investing heavily in sulphur-removing capabilities to meet the new fuel specifications, and are expected to be ready by 2014, traders said.

But the upcoming lower sulphur measure on gasoline is unlikely to affect the way contract prices are assessed by oil pricing agency Platts.

"The current sulphur content traded is 500 parts per million (ppm) and Platts will consider revising it if the industry pushes for it," said a Singapore-based trader.

"But I doubt there will be an eager push to change the current specifications because the (Southeast Asian) region is still predominantly using 500 ppm gasoline."

Singapore is an exporter of gasoline and diesel.

The impact on diesel is also expected to be minimal as refineries already supply the greener 10 ppm sulphur diesel to petrol stations.

"Singapore's actual demand is pretty small, so the (move)won't have a major impact," an industry source said. (Reporting by Jessica Jaganathan; Additional reporting by Seng Li Peng)

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