Oil min to ensure 5% ethanol blending by OMCs

The government today asked the petroleum ministry to ensure that oil companies compulsorily sold petrol mixed with 5 per cent ethanol.

The government had in November 2006 mandated that ethanol should be blended in a 5 per cent proportion with petrol to be sold throughout India, except in areas like North-Eastern states and Jammu and Kashmir.

Subsequently, it stipulated that the amount of ethanol in petrol may be optionally ramped up to 10 per cent from October 2007 and made compulsory with effect from October 2008.

But oil marketing companies (OMCs) — Indian Oil, Bharat Petroleum and Hindustan Petroleum — could not even implement the 5 per cent blend due to shortage of ethanol.

The Cabinet Committee on Economic Affairs (CCEA) today made it mandatory for OMCs to sell 5 per cent blended petrol.

“CCEA reiterated an earlier decision that there shall be a mandatory blending of 5 per cent of ethanol. It has instructed the petroleum ministry to ensure that all OMCs implement the decision,” Home Minister P Chidambaram told reporters here after a CCEA meeting.

He said, in order to ensure that there was no supply dislocation of ethanol, a small group of officials representing the Ministries of Food, Consumer Affairs, Renewable Energy and Petroleum would be constituted.

Officials said there was a 84 per cent shortfall in procurement of ethanol by OMCs this financial year. Till September, OMCs procured only 4.75 crore litres of ethanol, compared to a prorated tender quantity of 30.25 crore litres.

No procurement has been made so far in West Bengal, Orissa, Chhattisgarh, Tamil Nadu and Madhya Pradesh, whlie other states like Maharashtra have recorded a shortfall of 98 per cent. Procurement has also been extremely low in Uttarakahad, Kerala and Gujarat.

“A group of officers will be constituted to ensure that there is no supply dislocation so that ethanol produced by the sugar industry is easily available to OMCs and the blending programme can go forward without any hitch,” Chidambaram said.

He said the group of officers will monitor demand-supply situation of ethanol and ensure that the environment-friendly programme is implemented in “letter and spirit”.

Chidambaram also dispelled apprehension that there was shortage of ethanol, saying “there is enough ethanol in the country”, adding, there was no reason why temporary dislocation in supply should derail a good programme.