In a bid to cut the nation's spiralling oil import bill, government is likely to make it mandatory to dope petrol and diesel with 20 per cent bio-diesel by 2017.
A Group of Ministers, headed by Agriculture Minister Sharad Pawar, last month decided to hike the amount of ethanol blended with petrol from 5 per cent which has been in effect since October last year, to 20 per cent by 2017, official sources said.
While petrol doped with 5 per cent ethanol extracted from sugarcane is being sold all over the country except in Jammu and Kashmir, northeastern states and island territories, experiments are on for blending biodiesel extracted from non -edible oils like Jatropha in diesel.
Sources said the National Biofuel Policy seeks to replace 10 per cent of petroleum products requirement in the country with biofuels to save up to Rs 20,000 crore in import bill.
India in 2007-08 paid $69 billion for importing crude oil. With prices firming up, this is likely to jump to $120 billion in current year.
The GoM suggested that biodiesel and bio-ethanol be given declared good status thereby attracting a uniform 4 per cent central sales tax instead of varied state sales tax rates.
The quantity of ethanol mixed with petrol is to be raised to 10 per cent by October this year but industry has voiced concerns about the availability of ethanol at right price. It also wanted that the government should fix the minimum support price for the non-edible oil seeds to enthuse farmers.
The National Policy on Bio-fuels will now be drafted by the Ministry of New and Renewable Energy and taken to the Cabinet for approval.
