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India, Brazil to study ethanol-mixed diesel

The Union Minister for Petroleum and Natural Gas Ram Naik on Friday said while the sale of 5 per cent ethanol-doped petrol would be mandatory from January1, 2003 in nine States and four Union Territories, the government would now conduct experiments on mixing ethanol with diesel.

To this effect, India has signed a memorandum of understanding with Brazil.

He said that if this experiment proved successful, the import of crude oil would reduce drastically as consumption of diesel was about 80 per cent of total oil consumption.

He said an allocation of Rs 750 crores (Rs 7.5 billion) had been made for conducting these experiments and a team of experts from Brazil had already visited India.

Brazil had been producing 13 billion litres (1300 crores litres) of ethanol and mixing it with petrol since 1931, the minister said adding that the ethanol-blended petrol was more environment-friendly.

Naik said the country had become self-sufficient in refined petrol and diesel and was only importing the crude oil, but the imports still ranged between Rs 67,000 crore (Rs 670 billion) to Rs 80,000 crore (Rs 800 billion) due to five to six per cent rise in consumption every year.

Referring to the proposed Iran-India gas pipeline project, Naik said the estimated cost of the project by sea and over land was being worked out by the gas companies of Iran and India.

He said the overland pipeline had to pass through Pakistan and safety and security of the pipeline, which would be the main source of energy for a large number of industrial units, was of utmost importance and this aspect had to be adequately addressed.

Naik said the government had deregulated the petroleum sector and removed all controls from April 1 this year and the prices of petroleum products were being fixed by the oil companies on the basis of rise or fall in international prices every fortnight.

The government had no role in fixing the prices but it would intervene by adjusting the excise duty in case there was any abnormal rise or fall in prices.

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