New Delhi, July 8: The Group of Ministers (GoM) meeting tomorrow is likely to recommend offering market price to heavy oil generating products in the coming National Biofuel Policy and fixing the Minimum Support Price (MSP) for oilseeds. In case of their market prices falling below the MSP, the gap would be subsidised by the government.

The GoM headed by Agriculture Minister Sharad Pawar is likely to finalise the policy and recommend setting up a high-powered board having multi-ministerial representation to enable and operationalise promotion of biofuel plantations, official sources said. The policy will support fixing of MSP for oilseeds to provide adequate income to cultivators and it would be periodically reviewed to ensure their perennial income, they said.

“The GoM is likely to recommend fixing of Minimum Purchase Price for the purchase of bio-diesel by Oil Marketing Companies (OMCs) by way of linking it to the prevailing diesel price,” sources said and pointed out that in the event of diesel prices falling below the minimum benchmark, the government would compensate the price of bio-diesel for OMCs. The broad policy of the central government has already been enunciated by the Planning Commission.

The GoM is understood to have favoured incentivising central government agencies in aiding the implementation of the biofuel programme. Notwithstanding the finalisation of the policy, some states like Chhattisgarh, Karnataka and Uttarakhand have already initiated their own models of biofuel plantations. But farmers are reportedly unwilling to undertake jatropha plantation on a mega scale to meet the feedstock requirement of bio-diesel plants in the absence of clear-cut policy guidelines from the Centre, sources said.

However, the country’s dream to overcome fuel shortage through alternative energy sources may not fructify, as India does not have adequate quantities of ethanol for blending it with petrol even at 5 per cent levels. A Planning Commission expert group has already pointed out that while the availability of molasses is adequate, surplus ethanol to be blended with petrol is not there. This is primarily because the demand for ethanol to be converted into potable alcohol in the country is extremely huge.

Moreover, sugarcane-growing states restrict free movement of molasses leading to ethanol shortage to promote potable liquor production within the state. Another major reason for inadequate availability of ethanol is due to the fact that domestic molasses remain the cheapest option for the liquor industry as ethanol imported for potable purposes attracts high customs duty making imports unviable, sources said.

Fuelling alternatives

•Group of ministers headed by agriculture minister Sharad Pawar likely to recommend setting up of a board to promote biofuel plantations

•Minimum support price to be fixed for oilseeds in order to provide adequate income to the cultivators.

•The support price would be periodically reviewed to ensure that the growers have a regular income and the cultivation continues

•Ministers likely to recommend MSP for the purchase of bio-diesel by oil marketing companies by linking it to the prevailing diesel price