The move for mandatory EBP would overrule the recommendation of PM’s Economic Advisory Council that blending be kept optional to deal with fickle supply of the bio-fuel.
The move to make blending of petrol with ethanol mandatory would put India in the select band of countries with mandatory bio-petrol. India has struggled to get petrol blending off the ground, despite a Union Cabinet decision in 2010.
Seeking to kick-start the frozen policy objective, the PM’s Economic Advisory Council (PMEAC) had recommended that uncertainty over availability of ethanol could be dealt by making EBP optional — the oil marketing companies could be given the choice to have higher targets when ethanol supply is bountiful and lower in an adverse year.
However, the new and renewable energy ministry has moved a Cabinet note recommending that EBP should be mandatory with 5% target for oil companies. It said PMEAC’s optional EBP should not be considered.
Fuel blending has been suggested as silver bullet to India’s elusive search for a sort of antidote to huge oil imports, which render economy hostage to price volatility in international markets. It is also seen as a long-term solution to reducing dependence on fossil fuel while increasing the energy efficiency of the fuel.