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CCEA approves bio-ethanol pricing formula

23 Nov 2012 Evaluate

The Cabinet Committee on Economic Affairs (CCEA) has approved the pricing formula for procurement of bio-ethanol by oil marketing companies (OMCs) and its suppliers which will help the country save around 100 crore litres of fuel every year. Further, the mandatory mixing of 5% ethanol in petrol will be implemented across the country from next month.

Earlier in 2009, the CCEA had decided to mix 5% ethanol in petrol but it could not be implemented due to opposition by some sections in the chemical and petroleum sectors. The mandatory ethanol blending with petrol will be implemented across the country, for which the Petroleum Ministry will issue a gazette notification in the coming days, for OMC’s to implement from 2012-13 sugar season, effective from December 1, 2012.

The ethanol-blending programme is currently being implemented in 13 states with blending level of about 2% against a mandatory target of 5%. As per the reservations against the proposal that domestic suppliers would not be able to meet the supply requirements, the government has also allowed import of ethanol in case of shortfalls. Ethanol is a by-product of sugarcane.

The suggestion moved by the Ministry of New and Renewable Energy is expected to help the country in reducing the oil bill for 100 crore litres of petrol and it also help in lessening carbon dioxide and carbon monoxide emissions by around 15%.

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