The Hindu Business Line : `Ethanol-blended petrol sale subject to availability'

Sale of ethanol-blended petrol will become mandatory for oil marketing companies (OMCs) only if there is sufficient availability of this alternative fuel at an acceptable price, the Petroleum Secretary, Mr M.S. Srinivasan, said.

The Government had earlier wanted to mandate OMCs to sell ethanol-blended petrol in all States — except those in the northeastern region — from October 1 this year.

"But this `mandatory' is subject to availability," Mr Srinivasan said, speaking on the sidelines of a news conference here on Monday.

Decision in a month

The Government is in talks with ethanol manufacturers and a decision on this matter will be taken in the next 30 days when OMCs will contract for the commodity, he said.

Once availability is ensured at a price acceptable to both ethanol manufacturers and oil marketing companies, ethanol-blended petrol can be made mandatory, he added.

There is a three-stage process drawn up by the Government leading to a final 10 per cent ethanol-blended petrol. This starts with a 5 per cent blend in nine States, moves to a 5 per cent blend in all States and settles at a 10 per cent blend in all States.

At the first stage, the requirement would be 0.4 million kilolitres, at the second 0.6 million kilolitres and finally 1.1 million kilolitres. This is a huge quantity, said Mr Srinivasan. Unless the Government is satisfied that this is going to be available and gets an assurance on this from the manufacturers, ethanol-blended petrol cannot be made mandatory.

Ethanol price shot above the price of gasoline in some markets of the world recently, he had earlier said.

India may not have that much ethanol to offer, pointed out a commodity analyst. "Even in the recent times we have imported sugar,'' he said.

Sugar mills (producers of ethanol) and oil marketing companies have their differences on pricing. OMCs have indicated that unless ethanol is significantly cheaper than petrol, they will not easily submit to mandatory blending.

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