NEW DELHI: In an attempt to boost usage of ethanol, the government on Wednesday said that it will move towards market pricing for that used for blending with petrol.
Ethanol is a pure form of alcohol, and can be produced from agricultural produce such as sugar cane and corn. Blending of ethanol with petrol will lower the requirement for crude oil, which accounts for the largest foreign exchange expenditure for India. The strategy also has the potential to help farmers when there is a sugarcane oversupply. “We want to link the price to market dynamics. Government will move towards market dynamic pricing system,” Oil minister Dharmendra Pradhan said.
At present, the government fixes the price of ethanol and has permitted state run oil marketing companies to sell ethanol blended petrol ethanol percentage up to 10 percent. The delivered price of ethanol was fixed in the range of Rs 48.50 per litre to Rs 49.50 per litre for the last year.