Experts in the oil industry opine that if 10 per cent ethanol is mixed with fuel, around Rs 2.60 to Rs 2.90 can be cut down in terms of price. As part of the Ethanol Blending Programme, the Central government had earlier asked oil marketing companies to blend 10 per cent of ethanol with petrol by 2022. As of now, the Indian Sugar Manufacturers Association (ISMA) has said that the blending rate stands at 4.02 per cent.
The Hindu Business Line quoted South Asia Representative for the US Grains Council Amit Sachdev as saying, “Blending ethanol with fuel raises the octane number of petrol. Petrol prices can be lowered if OMCs pass on the gains. The standardised octane number for petrol in India is 91. The cost of additives required to achieve this rating is built into the price of petrol. At present, splash blending of ethanol without changing the octane level at the refinery increases the octane rating by 2 excessive points, costing an additional ₹1.60 per litre of petrol.”
The actual demand for ethanol stands at 313.5 crore litres as of this year, but the domestic industry has been only able to produce 176.3 crore litres. If the numbers can be matched up, then we can see a reduction in fuel prices soon.
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