The Telegraph
Since 1st March, 1999
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Excise rebate for gasohol

Mumbai, Jan. 1 (PTI): The Centre will give an excise duty rebate of 30 paise per litre on gasohol, the 5 per cent ethanol-blended petrol launched today.

“In order to encourage the ethanol-based industry, the Union finance minister has agreed to provide a 30 paise rebate on ethanol-blended petrol. We are seeking a similar rebate from states on sales tax as well,” Union minister for petroleum and natural gas Ram Naik said after the national launch of the blended fuel.

He said finance ministry had also issued a notification stating that ethanol production is not separate, but a part of the sugar industry. National oil companies IOC, HPCL and BPCL have already called for tenders for supply of ethanol for three months, he said, adding that the bidders shall have to price their rates competitively.

“Imported ethanol is priced at around Rs 14-15 per litre while interested parties have quoted higher. We are in a process of negotiating the rates and I hope that we shall not pay more than the imported price,” Naik said.

As per the tenders, there is a shortfall of about 35,000 kilolitre of ethanol while the requirement is around 320-350 million litre. Naik said, in the long run, after the pricing issue over ethanol is solved with the Ethanol Manufacturers Association, the price of petrol would come down by 20-25 paise.

He said efforts were on to blend ethanol with diesel and in the last stage of this national launch, the government would allow 5 per cent blending in the country’s most used fuel.

“Eighty per cent of India’s automobile fuel consumed in our country constitute diesel alone. The government has decided to supply ethanol-blended diesel in the fourth phase and sanctioned Rs 4 crore for research and development studies for this, which are at an advanced stage of completion,” he added.

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