Blend with care

| Updated on January 17, 2018

10 per cent ethanol-blended petrol is a good idea but it needs careful implementation

Prime Minister Narendra Modi wants ethanol blending in petrol to be pushed up to 10 per cent over time. His Cabinet colleague, Minister for Road Transport and Highways Nitin Gadkari, is even more ambitious and wants to take it up to 22.5 per cent . These are laudable objectives indeed and worth following up given India’s rising imports of crude oil. The country spent over ₹4 lakh crore to import 202 million tonnes of crude oil in 2015-16; the International Energy Agency has projected that India’s crude oil imports would rise to 550 million tonnes by 2040. Yet, the approach should be carefully thought out and well calibrated simply because the ramifications are many.

The Centre has been pushing for 5 per cent blending of petrol with ethanol for a decade now without success. The Modi government has succeeded in pushing it to 3-4 per cent now but again, that is not uniform across the country simply because States such as Tamil Nadu do not allow sale of ethanol for blending with petrol. Ethanol, which is a by-product of crushing sugarcane, is sought by potable as well as industrial alcohol manufacturers, pushing up demand. A crucial factor for blending not taking off is that oil companies and ethanol suppliers have been squabbling over its price. That will prove to be a big hurdle to cross in the prevailing oil price scenario. The price of petrol at the refinery gate is less than half that of ethanol today. Even a 5 per cent blend will, therefore, lead to an increase in the retail price of petrol. Secondly, the calorific value of ethanol is about a third less than petrol which means that blending of 10 per cent or above will lead to a decrease in the fuel efficiency of the vehicle.

There are other practical issues. Two-wheelers, which account for three-fourths of the petrol consumed, cannot run on 10 per cent blended fuel without a change in their fuel systems. Ditto with older cars already on the roads which are built for either 5 per cent or less blended fuel. With the corrosive property of 10 per cent blended fuel being high, car manufacturers have to carry out modifications in their engine designs for the newer models. Also, in the transition period, we may have to look at a system where retail outlets have separate dispensers for normal and 10 per cent blended petrol so that consumers can tank up appropriately. This calls for an overhaul of storage and transport systems for fuels not just at the retail outlets but also at the depots. There has to be a uniform policy for blending across the country without any State being an outlier as that will cause logistical difficulties for both consumers and the oil companies. Consistent and adequate supply of ethanol has also to be ensured before the system is enforced. Its availability cannot be hostage to the sugar price cycle. Considering the complexity of the issues , the Centre would be well advised to adopt a considered and holistic approach.

Published on August 24, 2016

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