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Posted on Nov 22, 10:06PM | IANS
The union cabinet Thursday approved the pricing formula for procurement of bio-ethanol along with implementation of five percent mandatory ethanol blending with petrol.
The decision relates to bio-ethanol procurement by oil marketing companies (OMCs) for the Ethanol Blended Petrol (EBP) Programme from the 2012-13 sugar season, effective from Dec 1, 2012.
According to an official release, the procurement price of ethanol will be decided between OMCs and suppliers.
In case of any shortfall in domestic supply, the OMCs and chemical companies are free to import ethanol.
The EBP Programme is presently being implemented in 13 states with blending levels of about two percent against a mandatory target of five percent.
The measure will ensure an alternative market for the farmers who are frequently affected in case of bumper sugarcane harvests and lack of market demand.
The government is looking to encourage much larger-scale use of ethanol as bio-fuel, which, besides being environment friendly, would also help reduce dependence on imported crude.
The Prime Minister's Economic Advisory Council had, in March 2011, recommended fixing the price of bio-ethanol through the market mechanism.