Our Bureau

New Delhi, Dec 5

The biodiesel industry has sought higher price for its product than what has been fixed by the Government.

"The Government has fixed the price for biodiesel delivered at refineries at Rs 26.50 a litre, which does not cover the cost of production," said Mr Sandeep Chaturvedi, President of the Biodiesel Association of India.

Speaking to newspersons, he said that based on the current costs incurred and limited availability of raw material, the ex-factory price for biodiesel should be not less than Rs 33 per litre.

While appealing to the Government to establish a clear policy that can solve the fast-growing energy needs of the country to a great extent, while supporting agricultural (rural) development through eco-friendly means, he said that the country's jatropha plantations are at a nascent stage and will need to be nurtured for 5-7 years before their oil is available for commercial processing into bio-diesel.

Biodiesel is the energy or power produced from natural, bio-degradable sources such as vegetable oils, biomass (e.g. cow manure) or agricultural produce such as jatropha, karanj and other non-edible oils, including waste industrial oils and leftovers from palm refining.

Jatropha is a traditional drought-resistant non-edible plant, which grows in tropical and subtropical countries. The oil processed from jatropha seeds blends well with diesel.

"Until jatropha oil is available in ample volumes, the Government should allow imports of non-edible oils at lower rates of Customs duty at par with the tariff on crude oil."

Currently, import duty of 15 per cent is levied on many non-edible oils along with 16 per cent countervailing duty, while the import duty on crude oil is only five per cent, he said.

(This article was published in the Business Line print edition dated December 6, 2006)
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