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A boost to supply of ethanol

NEW DELHI: In what could be a major step towards successful implementation of the “National programme for supply of ethanol-blended petrol (EBP),” the Petroleum & Natural Gas Minister Murli Deora on Monday succeeded in convincing the Maharashtra Chief Minister Vilasrao Deshmukh for removal of export duty on ethanol, helping excess supply of ethanol from Maharashtra to other States.

After his meeting with Mr. Deora at Mumbai, the Maharashtra Chief Minister announced withdrawal of the export fee of Rs.1,500 per kilo litre (Rs.1.5 per litre), presently being imposed on ethanol supplies to other States. “This will ensure supply of excess ethanol from Maharashtra to other States, thus making the ambitious programme run successfully in many States and Union Territories. It will also benefit sugarcane farmers of Maharashtra,” Mr. Deora said while reacting to the announcement.

The Petroleum Minister stressed that the EBP programme (5 per cent blending of petrol with ethanol launched on November 1, 2006) is aimed at contributing to energy security through use of alternative fuel sources and also help sugarcane farmers to earn additional income. This initiative is environment friendly as the oxygenate nature of ethanol ensures greater petrol combustion leading to lesser emission of pollutants, he added.

So far, EBP is being supplied in 11 States and three Union Territories covering about 70 per cent of the identified States. Out of a total requirement of 180 crore litres ethanol for three years, oil marketing companies (OMCs) have already contracted a quantity of 140 crore litres. They have so far procured 19.35 crore litres under the programme as on December 31, 2007. The programme in few States including West Bengal, Tamil Nadu, Chhattisgarh and Kerala could not be implemented for various reasons.

Mr. Deora said there are certain procedural impediments which have affected the free movement of ethanol across States and to sort it out he has been holding meetings with the State governments concerned. He also raised the issue of rationalisation octroi duty levied by Brihan-Mumbai Municipal Corporation (BMC) on crude oil procured by BPCL and HPCL.

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