Government allows OMCs to sell ethanol petrol with up to 10% content

The Government has permitted Oil Marketing Companies (OMC) to sell ethanol blended petrol with the percentage of ethanol up to 10 percent as per BIS Specification to achieve 5 percent ethanol blending across the country as a whole. During the sugar year 2014-15, OMCs have achieved a blending percentage of 2.3 percent. 

The Government has fixed the price of ethanol. As petrol was decontrolled since June 2010, OMCs take appropriate decision on pricing of petrol as per international prices and market conditions. 

Ethanol blending in petrol results in saving of petrol to the extent of its blending and consequent foreign exchange. The potential foreign exchange earnings for the Sugar Year 2014-15 amounts to around US$ 285 million (Rs 1,900 crore). 

In order to improve the availability of ethanol and encourage ethanol blending, the government has taken following steps:

1.  The Government has fixed the delivered price of ethanol in the range of Rs 48.50/litre to Rs 49.50/litre.

2.  Ethanol produced from other non-food feedstocks besides molasses, like cellulosic and ligno cellulosic materials including petrochemical route, have been allowed to be procured.

3.  Ministry of Petroleum and Natural Gas, on September 1, 2015, inter-alia has asked OMCs to target 10 percent blending of ethanol in petrol in as many states as possible.

4.  The procedure of procurement of ethanol under the EBP has been simplified to streamline the entire ethanol supply chain. 

5.  Excise duty has been waived on ethanol supplies to OMCs for EBP by sugar mills during 2015-16. 

The above initiatives to incentivize Ethanol Blended Petrol (EBP) Programme are expected to increase blending of ethanol in the near future.