Mandatory ethanol blending from Oct likely

Posted: Tuesday, May 09, 2006 at 0118 hrs IST
Updated: Tuesday, May 09, 2006 at 0118 hrs IST

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Fuel prices to be rolled back if crude dips: Deora No oil price hike immediately, says Deora

Mumbai, May 8: In view of spiraling crude prices, the Centre plans to make blending of 5% ethanol with petrol mandatory by oil companies from October 2006 and, depending upon its success, expects to increase it to 10% from October 2007.

Petroleum minister Murli Deora has asked IOC, BPCL and HPCL to prepare for this by making necessary changes at the petrol pumps and also simultaneously hold talks with ethanol producers to achieve undisrupted supply.

The Centre is expected to apply similar norms to private sector players like Reliance Industries and Essar.

There are 125 ethanol producers in all with annual capacity of 125 crore litres in Maharashtra, UP , Gujarat, TN AP and Karnataka.

Oil companies on Monday held talks with ethanol producers and sugar cooperatives from Maharashtra to assess the current position and possible additions in future.

Mr Deora told FE: “I have already held a meeting last week in the presence of union agriculture minister Sharad Pawar in order to give a push to the proposed exercise. My ministry will soon appoint a special officer from IOC as the coordinator with a mandate to pursue issues relating to ethanol blending with the oil companies, ethanol producers and related agencies. The government is aware that ethanol blending will give much-needed relief for oil companies at a time crude oil prices have been rising.”

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