Home Finance Govt. To Get A Plan That Will Cut Petrol Prices By 10%

Govt. To Get A Plan That Will Cut Petrol Prices By 10%

Niti Aayog, the policy think tank of the government, will soon test passenger vehicles to run on petrol blended with 15% methanol. Although the plan is subject to approval by the cabinet, if approved, this could cut petrol prices by 10%.

Blending petrol with 15% methanol isn’t a new idea, per se. The government had given hints of trying out this new composition last year. But the plan was never really executed.

Cabinet Secretary PK Sing=ha will personally monitor the progress

This time around, though, the government is seriously considering the move. According to the Economic Times, a high-level meeting was held last week to discuss the details of this proposal, and cabinet secretary Mr. PK Sinha is personally keeping a check on it.

Current Composition of Fuel in India

Presently, India is using fuel blended with 10% ethanol. The production of ethanol, however, is limited. As a result, there is a heavy load on importing fuel from outside the country.

India, apparently, is the third largest importer of oil worldwide. With a consumption of 2900 crore litres of petrol and 9000 crore litres of diesel, its oil import bill stands at close to Rs. 5 lakh crore.

India is the third largest importer of crude oil

As India grows, its fuel demand is likely to go up. Thus, the country needs some alternatives and methanol blended petrol seems to offer just that.

Petrol can be blended with both ethanol and methanol, and India is looking to try out the latter combination now.

Advantages of Methanol-Blended Petrol

Methanol, made from coal, is a highly efficient fuel which can be blended with gasoline or diesel, emits lesser NOx (nitrogen oxides), PM (particulate matter) and no SOx (sulphur oxides).

It is the simplest carbon compound that can be used as an alternative fuel in India.

Using methanol-blended petrol has numerous advantages, three of which are – cost-effectiveness, lesser pollution, and reduction in oil import bill. 


You’d also like to read: Why Are The Petrol And Diesel Prices In India Amongst The Highest In The World? 


Methanol costs around Rs 20 per litre, which when compared to Rs 42 per litre ethanol, is much cheaper. This is why a 15 percent blend could cut petrol prices by 10%.

15% percent methanol blended petrol will mean cheaper prices

In addition, methanol is a much cleaner fuel. Numbers back this fact too. Niti Aayog pointed out that if 20% of crude oil consumption is replaced by methanol, pollution can be reduced by 40%.

Another very important role that methanol blended fuel will play is in reducing crude imports. As per the plan, if the country moves to 15% blended fuel both for transportation and cooking, it could see an annual reduction of 100 billion dollars in oil imports.

Supply of Methanol

Since methanol is produced from coal, and India has the 5th largest coal reserves in the world, it can use its potential to produce methanol instead of relying on imports.

At present, though, moving from ethanol-blended fuel to methanol blended fuel will simply mean shifting our dependence on the Middle East countries for oil imports to China for methanol imports.

Supply of methanol will be a concern initially

Nitin Gadkari, the Minister for Road Transport and Highways, mentioned last year that factories in and around Mumbai, including Deepak Fertilisers and Rashtriya Chemicals and Fertilisers (RCF) can produce methanol.

Besides, three Research and Development projects worth Rs 100 crore are being run in Pune, Hyderabad, and Trichi for commercial production of methanol from coal.

Preparedness of the Auto Industry

While lightly blended fuels can be used in regular internal combustion engines with close to no modifications, as the blend increases, adjustments are required in the vehicles.

A lot of research will go into understanding how much changes will be required in the engines. Engine compatibility is an important issue going forward.

Engine compatibility is an important issue going forward

The oil industry and the auto industry will need to work together to find a solution to this, but a solution will surely be found out.

Whatever be the outcome of the upcoming tests by Niti Aayog, one thing is for sure, it will take a while before India can switch to 15% methanol blended fuel. But when it does, petrol will be cheaper and air, cleaner. 


Image Credits: Google Images

Sources: The Economic Times, Livemint, Autocar + more


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