Ethanol blending has kept petrol prices in check, avoiding Rs 125 per litre mark

Petrol prices in Delhi would have risen to around Rs 125 per litre during the recent West Asian crisis without ethanol blending, the government said on Friday, claiming the programme helped consumers save nearly Rs 30 per litre by cushioning the impact of the global crude oil price surge.

According to the Ministry of Petroleum and Natural Gas, when the Indian crude basket climbed to around $135 per barrel during the crisis, petrol without ethanol blending was projected to retail at about Rs 125 per litre in the national capital.

However, consumers paid Rs 94.77 per litre as 20 per cent of every litre comprised domestically produced ethanol procured at stable, pre-agreed prices.

The ministry said the savings demonstrated the role of ethanol blending in strengthening India's energy security while reducing dependence on imported crude oil and keeping a larger share of the country's fuel expenditure within the domestic economy.

It stressed that the Ethanol Blended Petrol (EBP) Programme balances food security, farmer welfare and energy security. Only surplus grain certified by the Department of Food and Public Distribution after meeting all food security obligations is approved for ethanol production, it said.

The government added that grain procured under the Public Distribution System, the National Food Security Act, welfare schemes and mandatory buffer stock requirements is not diverted for ethanol production before food security needs are met.

It also noted that damaged grain, broken rice and foodgrain unfit for human consumption are utilised under the programme.

According to the ministry, the EBP Programme has so far helped India save more than Rs 1.97 lakh crore in foreign exchange by reducing crude oil imports, while cutting over 950 lakh metric tonnes of carbon dioxide emissions.

It has also resulted in payments of more than Rs 1.66 lakh crore to farmers and distillers, creating a stable domestic market for agricultural produce.

The ministry said ethanol blending is intended to reduce India's dependence on imported crude oil, which still accounts for nearly 88 per cent of the country's oil requirement, and acts as an insurance policy against global oil price shocks.