India Backs Away from Ethanol Blend Mandate

26 November 2004

The Indian government has rescinded the mandatory blending of ethanol in gasoline based, it says, on poor ethanol supply. The new ruling of the Petroleum Ministry makes “sale of ethanol-blended petrol mandatory only when the price of sourcing indigenous ethanol for supply of ethanol-blended petrol is comparable to the price of indigenous ethanol for alternative uses, the delivery price is comparable to the import parity price of petrol at that location and if the indigenous ethanol industry is able to maintain uninterrupted supply.”

The earlier policy mandated  a 5% ethanol blend in nine sugarcane-producing states to reduce India’s dependence on imported oil. The blending rule was then to be rolled out in the rest of the country. Subsequently, the percentage was to increase to 10% ethanol, accompanied by an extension of ethanol blending to diesel. The nation-wide roll-out never happened.