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A file picture of train running on bio-diesel in Tiruchi.

Mamuni Das

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New Delhi, July 12 Indian Railways is likely to procure bio-diesel at Rs 31.34 a litre, which is about Rs 3-3.50 lower than the price it currently pays for high-speed diesel. Railways had floated a tender in the second half of 2007 to procure 50,000 kilo litres of bio-diesel.

Initially, Railways plans to use bio-diesel at ten per cent blending levels in all its 38 mainline locomotive sheds on a pilot basis. “If the project is successful, the blending levels can be moved further up,” said sources.

Bulk of the bio-diesel to be procured is expected to be an imported crude palm-oil derivative, the technology for which is patented by a publicly listed Malaysian firm Carotech Bhd.

Carotech Bhd has formed a 50:50 joint venture with an Indian firm, Khard Soaps Pvt Ltd, called Khard-Carotech, which is expected to supply bulk of the Railways’ requirement (about 44,000 kilo litres).

The Malaysian firm has a patented technology and produces bio-diesel (CaroDiesel) derived from crude palm oil — a renewable biological resource, for use in diesel engine, according to Carotech’s Web site.

The remaining bio-diesel requirement of Railways (about 6,000 kilo litres) may be supplied by two Indian firms — Southern Online and Royal Energy. However, these firms are likely to supply jatropha-based bio-diesel. Currently, these domestic companies are unable to match the rates offered by Khard-Carotech. Thus, they will only be able to supply bio-diesel if they match the Khard-Carotech price.

The Railways’ move to blend 10 per cent of bio-diesel is being viewed as an energy management strategy. With an annual consumption of 2.27 million kilo litres of high-speed diesel (HSD), Railways is the single-largest high-speed diesel user in the country.

Railways, which uses a mix of diesel and electric traction, moves about half of its passenger traffic and 38 per cent of freight traffic using diesel. In 2008-09, while on one hand Railways has been hit by the fuel price hike by about Rs 560 crore, it has also seen a significant reduction in the extent of discount it received from oil marketing firms.

In the current calendar year, it receives a discount of Rs 150 a kilolitre of HSD from oil marketing firms, over and above the rate at which the oil companies dispatch HSD to their retail outlets.

This is much lower than the Rs 1,125.27 a kilolitre discount that Railways enjoyed in 2007 and 2006.

For HSD procurement, the Railways enters into rate contracts with various oil marketing companies for the year.

The rate is generally the same for all companies and when finalised, the Ministry informs all zonal railways about the agreed rate.

More Stories on : Non-conventional Energy | Railways

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