Ethanol blending to reach 8% this year: Petroleum Minister

New Delhi : Ethanol blending with petrol has reached 4 per cent and it will rise to 8 per cent in sugar year 2018-19 (starting October) that will help the country enhance its energy security, Petroleum Minister Dharmendra Pradhan said on Friday.

Addressing 84th annual general meeting of the Indian Sugar Mills Association (ISMA) here, he said: "Ethanol blending has increased from 1.5 per cent four years ago to 4 per cent now. This year it will reach 8 per cent."

The Oil Marketing Companies (OMCs) are targeting to achieve 20 per cent blending by 2022.

Pradhan said buying ethanol was a costly option for the OMCs but the government took a holistic view to promote ethanol production in order to benefit farmers and support the energy demand.

"Efforts are being made to ensure our energy requirements are not dependent on other countries, so we are trying to convert our products (for power generation). It is fine if we have to pay more for it," he said.

The government spent foreign exchange worth Rs 8-10 lakh crore to buy crude oil and LNG to meet the domestic energy demand, he added.

ISMA president Gaurav Goel said the level of ethanol blending will reach 8 per cent in 2018-19 and the target of 20 per cent by 2022 is achievable.

In June this year, the government approved a mechanism for procurement of ethanol by OMCs and hiked ex-mill price for ethanol derived out of C-heavy molasses to Rs 43.70 per litre.

Speaking about sugar production, Goel said the country produced 32.5 million tonnes in sugar year 2017-18. In 2018-19 the opening stock was 10.7 million tonnes and the production is expected to be 31.5 million tonnes.

He demanded that the government should link prices of sugarcane and sugar, which he said would lead to zero cane arrear and "peace" in the industry-government relations.