Ethanol-blended petrol (gasohol) is expected to be cheaper by at least 25-30 paise per litre.
Further, the Union Finance Minister Jaswant Singh has agreed to give a 30 paise rebate on excise duty on ethanol-blended petrol.
This was disclosed by Ram Naik, Union minister for petroleum and natural gas, in Mumbai on Wednesday while announcing the National launch of supply of five per cent ethanol-blended petrol'.The price of the blended petrol would still be cheaper provided the locally procured anhydrous ethanol is priced competitively with the imported product.
Naik claimed that the locally produced anhydrous ethanol is priced higher compared with imported ethanol which is quoted at Rs 14 per litre.
He indicated that there would be a shortfall of about 35,000 kilo litre of anhydrous ethanol. He anticipated a further shortfall considering drought in various parts of the country.
We anticipate that the production of sugarcane would go down. This would catapult into further shortfall in production of ethanol, he added.
Oil companies have already floated tenders for supply of anhydrous ethanoil to meet the requirements for three months, January-March 2003.
The government has decided to begin supply of five per cent ethanol-blended petrol in nine states beginning Maharashtra, Andhra Pradesh, Punjab and Uttar Pradesh.
Popularly known as gasohol, the ethanol-blended petrol will be later available in Goa, Gujarat, Haryana, Karnataka and Tamil Nadu as well as the union territories of Chandigarh, Daman and Diu, Dadra & Nagar Haveli and Pondicherry by June 2003.
Besides Maharashtra and Uttar Pradesh, the other states have sought more time to complete infrastructure to produce anhydrous ethanol.
The current total consumption of gasoline in these nine states and the four union territories is about 4.6 million tonne per annum and the requirement of ethanol at five per cent blend ratio works out to 320-350 million litres.
