OMCs to blend 5% ethanol with petrol: Media Reports

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The Cabinet Committee on Economic Affairs (CCEA) has made it mandatory for three major oil marketing companies (OMCs) including Bharat Petroleum Corp Ltd, Hindustan Petroleum Corp Ltd and Indian Oil Corporation to blend 5 per cent ethanol with petrol, said the media reports.

This move is taken in view to reduce the country's fuel import bill and lower India's dependence on fossil fuel as the ethanol prices are lower than petrol, the report stated.

OMCs have been mixing ethanol with petrol for the last two years; however, due to the absence of any clear directive, the policy was partially implemented.

Moreover, CCEA that is headed by Prime Minister Manmohan Singh has also approved market-based pricing of the biofuel, thereby opening the market for ethanol producers.

The CCEA has also allowed OMCs to import ethanol, in case they face any shortage of the biofuel in the domestic market for blending purpose.

"There is no shortage of ethanol in the country as it had produced 220 crore liters of ethanol in 2010-11. However, if need be, the OMCs may be allowed to imported for blending purpose," a minister told media.

"While a liter of petrol costs around 70, ethanol costs 40 a liter. Besides, ethanol gives better mileage to the consumer. A study by Indian Oil Corporation says that it also lowers emissions cutting down pollution levels," a ministry official stated.

"After a long wait, finally there is a firm decision on ethanol blending. It will boost the ethanol industry and we expect petroleum ministry to come up with gazette notification soon to start this programme as early as January next year," Indian Sugar Mills Association, Director General, Abinash Verma said.

Story first published: Friday, November 23, 2012, 13:30 [IST]
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