Spirit-doped petrol policy

The government will continue with the previous regime's programme for ethanol-doped petrol, but is likely to review the policies regarding the same in view of the poor sugarcane crop this year and rising petroleum prices.

Speaking to reporters, Petroleum Minister Mani Shankar Aiyar said the review had been necessitated due to the limited availability of molasses, leading to spike in the price of ethanol.

A new notification by the petroleum ministry does not make it mandatory for oil companies to blend ethanol with petrol. Ethanol should be procured only if it was economical and did not impact the fuel price, it said.

The oil companies, which were not too comfortable with the idea from the beginning, have stopped blending ethanol.

The minister said costlier ethanol had reduced the price advantage which was available with ethanol-doped petrol till a few months back. Now, he said, the situation had changed with international petroleum prices rising.

Aiyar said the price of ethanol shot up as the alcohol industry had the first call on the limited molasses owing to poor sugarcane crop.

"We have not scrapped the ethanol programme. But we have called for a review to look at relative price of petrol and ethanol in view of limited supplies of molasses," Aiyar said.