New Delhi: The government is developing a strategy to significantly reduce the retail prices of ethanol for use as fuel in vehicles equipped with flex engines, aiming to promote alternate energy in transportation, reports The Financial Express.
A meeting will be convened after the Delhi assembly elections, involving the Ministry of Petroleum and Natural Gas and other stakeholders, to discuss measures to lower the retail cost of ethanol for vehicles. This was announced by Nitin Gadkari, Minister of Road Transport and Highways, at the Sugar-Ethanol and Bio-Energy India Conference. Flex-fuel engines can operate entirely on ethanol without the need for blending with other fuels.
Previously, ethanol intended for retail use as vehicle fuel was priced at ₹110 per litre. In contrast, the government pays ₹60 to ₹65 per litre for ethanol purchased by oil marketing companies from sugar mills for blending with petrol and diesel.
“I have proposed that ethanol as fuel should be sold at retail prices close to what the government pays for blending purposes, with a reasonable profit margin of ₹4-5 per litre. Indian Oil Corporation (IOC) had planned to set up 400 ethanol pumps but priced ethanol at ₹110 per litre, making it comparable to petrol prices,” Gadkari explained.
The minister highlighted that several major automakers, including Tata, Mahindra, Hyundai, Toyota, Suzuki, Hero, TVS, Bajaj, and Honda, have already developed vehicles and two-wheelers capable of running on 100% bio-ethanol.
To keep ethanol costs low, Gadkari suggested that ethanol-producing companies should be allowed to operate 5-6 ethanol pumps in their operational areas without requiring the bank guarantees mandated for traditional fuel pumps. Currently, petrol and diesel pump operators must provide a bank guarantee of ₹20 crore, a requirement many sugar mills cannot meet.
