PM sets up GoM to decide on ethanol blending in petrol

Prime Minister Singh constituted the first GoM in August 2010 following a squabble on implementing the 2007 decision.

Written by Amitav Ranjan | New Delhi | Published: August 29, 2012 12:46:31 am

Exactly two years later,Prime Minister Manmohan Singh has set up yet another Group of Ministers (GoM) after key ministries disagreed on the basic tenets of a 2007 Cabinet decision to blend ethanol extracted from sugarcane in petrol.

Last Thursday,the Cabinet Committee on Economic Affairs agreed on creating a GoM after the PM called the issue “more complicated” and asked the concerned ministers to resolve their differences in the GoM and bring it back to the CCEA.

Besides Agriculture Minister Sharad Pawar,who is likely to head the GoM,it comprises finance minister P Chidambaram,petroleum minister S Jaipal Reddy,chemical & fertiliser minister MK Azhagiri and minister of new and renewable energy Farooq Abdullah.

Prime Minister Singh constituted the first GoM in August 2010 following a squabble on implementing the 2007 decision. That GoM was headed by former finance minister Pranab Mukherjee and had Pawar,Azhagiri,former petroleum minister Murli Deora and then heavy industries minister late Vilasrao Deshmukh.

At the last week’s CCEA meeting,the most vociferous opposition was from DMK ally Azhagiri whose department reiterated its 2010 stand that the programme’s compulsory nature would eat into alcohol requirement for the chemicals industry.

Even though the proposal before the CCEA was to simply decide between free market or government-fixed pricing of ethanol,the discussion veered towards keeping the blending optional instead of a mandatory 5 per cent mixing,said sources.

However,this time the chemicals secretary used the views of the Planning Commission and the recommendations of the PM’s Economic Advisory Council that both blending and ethanol pricing be kept out of government purview.

Others supported the blending ratio,but were divided over ethanol pricing. There was also a disagreement between finance and chemicals ministry over the ethanol volumes that would be diverted for blending by state-run oil marketing companies.

The chemicals ministry informed the CCEA that 5 per cent ethanol blending would require 105 crore litres of ethanol annually and given the chemical and alcohol demand,the country would end up importing nearly 200 crore litres.

Ethanol is made from molasses and has been historically used for producing potable liquor or as an input for chemicals.

The OMCs have not been able to implement mandatory doping due to low availability of the product from producers.

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