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Updated: November 13, 2009 14:15 IST

Oil Ministry gets to work on sale of ethanol-blended petrol

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A file picture of Union Minister for Petroleum and Natural Gas Murli Deora. Photo: PTI
A file picture of Union Minister for Petroleum and Natural Gas Murli Deora. Photo: PTI

A day after receiving a rap from the Union Cabinet, Oil Minister Murli Deora on Friday called a meeting of fuel retailers and sugar millers to ensure compliance with a programme to sell ethanol-doped petrol.

“Against the requirement of 68 crore litres this year, tenders floated by oil marketing companies received bids for only 40 per cent ethanol volumes,” Mr. Deora told reporters.

The government had in 2006 mandated that ethanol should be blended in a 5 per cent-ratio with petrol. Subsequently, it stipulated that the amount of ethanol in petrol may be optionally ramped up to 10 per cent from October 2007 and made it compulsory with effect from October 2008.

But oil marketing companies (OMCs) - Indian Oil, Bharat Petroleum and Hindustan Petroleum - could not even implement the 5 per cent blend due to shortage of ethanol and Mr. Deora approached the Cabinet Committee on Economic Affairs for keeping the 10 per cent compulsory blending plan in abeyance.

The CCEA, however, rapped his ministry on Thursday for failing to implement even the 5 per cent programme and instructed it to ensure the programme is implemented in letter and spirit.

“We are facing shortage of ethanol and are trying to see how the compulsory blending of 5 per cent ethanol in petrol is met,” Mr. Deora said.

Former Indian Sugar Millers Association president Chandra Shekhar Nopany said the Rs 21.50 per litre price for ethanol needed revision. “We are confident of finding ways and means of meeting the current year demand.”

Petroleum Secretary R S Pandey, however, ruled out importing ethanol in case domestic millers were not able to supply the required quantities.

“The programme was made to help domestic farmers and so there is no question of importing ethanol,” he said.

Home Minister P Chidambaram had stated on Thursday that the “CCEA reiterated an earlier decision that there shall be a mandatory blending of five per cent of ethanol. It has instructed the Petroleum Ministry to ensure that all OMCs implement the decision.”

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