Public sector oil marketing firms will procure 120 crore litres of ethanol to reach the target of 5 per cent blending for petrol by September 2016, which is the end of the crop year 2015-16.

“Last year, we procured about 67 crore litres. But this year we will get 120 crore litres and maybe even higher. This would help in about 5 per cent blending for petrol. For several years we were stuck at 1-2 per cent but this year we will achieve the target,” said Dharmendra Pradhan, Minister of State (Independent Charge) for Petroleum and Natural Gas, after inaugurating a national seminar on ethanol.

Pradhan said that in States such as Uttar Pradesh, the blending levels can go up to 10 per cent which would benefit the farmers.

“PSUs are in the process of increasing the storage capacity for ethanol. This year we have also started procuring bio-diesel. Out of 85 crore litres that was tendered for procurement, 4 crore litres have come in already. In the next step, we want farmers to produce ethanol from different feedstock like wheat straw, rice straw, corn straw and others,” Pradhan said.

Currently, the production cost of ethanol is ₹42 a litre. Asked whether at current crude oil prices ethanol blending makes sense, Pradhan said, “The Government policy can’t be set on spot prices. Technology drives prices down and we will see the same here.”

After discussions with the Automotive Research Association of India, it has been found that blending can be raised till 15-20 per cent for both ethanol in petrol and bio-diesel in regular diesel without a major change in existing car engines, Pradhan said.

“For agricultural water pumps, the blending can even be 100 per cent of bio-diesel,” he added.

The Minister said that International Energy Agency estimates India’s crude oil imports to rise to 550 million tonnes by 2040 and increasing use of bio-fuels will help reduce dependence on imports as well as benefit the farmers.

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