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The oil ministry could be looking to cap the quantum of ethanol blending in petrol at 10 Percent, a move that could potentially end the tiffs between the supplier sugar industry and oil companies over proportion.

"Above 10 Percent, there can't be any blending in petrol because of the technical reasons given by the automobile industry," senior oil ministry officials. The ministry has been in consultation with all stakeholders of the 'Ethanol Blending Program (EBP)' over the recurring demand that the percentage of ethanol in petrol should be increased.

While the sugar industry, which supplies ethanol to oil marketing companies, has been pushing for an increase in ethanol blending to 15 Percent from the mandatory 5 Percent, Union Transport Minister Nitin Gadkari has expressed the intention to examine the possibility of using a fuel mix that has 85 Percent ethanol.

However, automobile manufacturers have said that over 10 Percent ethanol blended petrol will not be viable for the current generation of cars, according to oil ministry officials. A meeting was also held last week between the ministries of oil, food, agriculture, transport and stakeholders from the sugar producing states of UP and Maharashtra to revive the sugar sector with avenues to produce more ethanol.

In line with this plan, the oil ministry is also considering an upward revision in the price of ethanol. "The price of ethanol would not go down but it will BE commensurate and remain on the higher side," officials said. EBP was launched in 2013 with the aim of promoting green fuel and reducing the oil import bill of the state-run oil companies by blending petrol with 5 Percent ethanol.

As per the sugar industry, 5 Percent mandatory blending of ethanol in petrol can help oil companies save INR 6 per litre annually. However, EBP, which has been facing procedural delays and inter-industry tiffs, is yet to achieve the target of 5 Percent blending across the country.

Source-On Request