Ethanol blending may be raised to 10 per cent

The government plans to increase ethanol doping with petrol to 10 per cent shortly, Petroleum and Natural Gas Minister Murli Deora said today.

"We will implement 5 per cent ethanol blend by procuring an estimated 550 million litre ethanol. We plan to enhance this programme to 10 per cent blend shortly," Deora said at the inauguration of Petrotech 2007, an international event on petroleum industry.

Ethanol is made from molasses, which is a key by-product of sugarcane processing.The government has been pushing to introduce 5 per cent mandatory ethanol blending with petrol to cut down on its oil import bill and switch to greener fuels. However, only nine states have so far agreed to implement it.

The 5 per cent ethanol-doping programme, which was to take effect November 1 subject to economic viability and availability of ethanol, did not take off due to lack of consensus on pricing.

The sugar industry has been seeking higher price for selling ethanol to oil marketing companies. The industry is seeking a higher price of Rs 23-27 per litre compared to the current Rs 21.50 offered by oil marketing companies in some states.

The government plans to introduce 10 per cent ethanol doping from June. The sugar industry says at 5 per cent blending, the country would require 682 million litre ethanol in 2006-07 (October-September) sugar season, and the demand could rise to 1.3 billion litre with 10 per cent blending.

According to industry estimates, India has about 120 ethanol producing distilleries, which can manufacture 1.2 billion litre ethanol every year.