The Hindu Business Line : Ethanol blended petrol: Road show begins tomorrow

New Delhi April 3 The Ministry of Petroleum and Natural Gas is set to kick-off road shows to promote ethanol blended petrol (EBP) programme across the country.

"With this, the Ministry plans to formally launch the programme in zones where five per cent ethanol blending with petrol as decided by the Government can be implemented," a senior Petroleum Ministry official said.

High taxes and levy on ethanol imposed by some States have been a major deterrent for the smooth implementation of the programme by the oil retailing companies. The Petroleum Minister, Mr Murli Deora, would be flagging off the road show on Thursday in Andhra Pradesh, followed by Delhi and Maharashtra.

Ministry notification

The Ministry had on September 20 last year directed that, subject to commercial viability, OMCs shall sell five per cent ethanol blended petrol as per the Bureau of Indian Standards specifications in the notified 20 States and four Union Territories with effect from November 1, 2006.

Of the 20 States and four Union Territories, the tenders have been finalised for ethanol supply in respect of Uttar Pradesh, Uttaranchal, Bihar, Delhi, Jharkhand, Goa, Maharashtra (partially), Andhra Pradesh (partially), Karnataka, and Tamil Nadu.

The main grouse of the oil companies has been that the States have been imposing several licensing and procedural requirements, levying a plethora of taxes and restricting inter-State movement of industrial alcohol.

The OMCs are procuring ethanol from indigenous producers through open tender with a validity of three years extendable by two more years. In the States where the programme has been finalised, the OMCs are procuring 1,061.04 million litre of ethanol from sugar mills at an ex-distillery price of Rs 21.50 a litre. The Government needs 1,700 million litres for the next three years, but the industry has committed to supply only 75 per cent of the total requirement.

States where tenders could not be finalised were Haryana, Punjab, Himachal Pradesh, Rajasthan, Orissa, Gujarat, Madhya Pradesh, Chhattisgarh, and Union Territories of Chandigarh, Daman and Diu, Dadar and Nagar Haveli and Puducherry as the supplies are not viable due to levy of high taxes, and levies on ethanol.

Tenders could not be finalised in West Bengal and Kerala, as the States are yet to notify the applicable taxes/levies of ethanol supplies for the programme.

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