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Asian Viewpoints

India to increase blending of sugarcane extracted from ethanol with gasoline

The Indian government hopes to use 2.6bil liters of ethanol extracted from the sugarcane between December 2019 to November 2020 for blending with gasoline. During the previous year from December 2017 to December 2018, the government had used 2.00bil liters of ethanol to blend with gasoline. According to the Indian Ministry of Petroleum and Natural Gas, an increase in ethanol blending will help government cut its crude oil import bill by around $1.00 billion. Crude oil import could be reduced by around 2.00mil tonnes annually. 

To encourage farmers to grow more sugarcane and sugar mills to extract more ethanol, the Indian government had announced an increase in prices for ethanol from the sugar mills and the sugarcane growers. To encourage production of ethanol, government had increased the ethanol procurement price early this month by around 5%. With an increase in prices, government owned oil companies will pay INR 54.27 per litre for B grade ethanol, which is widely used by refining companies like Indian Oil Corp (IOCL), Bharat Petroleum Corp (BPCL) and Hindustan Petroleum Corp (HPCL) in mixing with gasoline.  

India imports nearly 82% to 85% of its oil requirements. Any decline in oil import due to blending of ethanol with gasoline would help the government save in its foreign exchange as well. The Indian government had started the ethanol blending program way back in 2002 but it picked up momentum further in 2014 when the present government led by Narendra Modi came into power.


India : Energy Desk  Kamlesh Trivedi   +81-3-3552-2411Copyright © RIM Intelligence Co. ALL RIGHTS RESERVED.