The government is likely to notify a policy on Tuesday for blending 15 per cent methanol with petrol, a move set to bring down fuel cost for motorists besides reducing pollution. Apart from reducing cost, the proposed fuel mix is expected to save huge foreign exchange of the country by cutting oil import.
A coal by-product, methanol is likely to cost only about Rs 22-24 a litre, thus reducing petrol price by about 10 per cent.
The government think tank NITI Aayog had earlier made a presentation to the Prime Minister’s Office (PMO) on the possible use of methanol and how its sufficient supply could be ensured for blending.
Ever since it came to power, the Modi government has been pushing for various alternative fuels to secure the country’s long-term energy needs. It has been promoting the use of solar power, wind power and bio-fuels that includes 10 per cent ethanol blending with petrol. Earlier this month, it approved a new bio-fuel policy allowing the use of food substitutes and food grains as feedstock for production of ethanol meant for blending with petrol.
“We have been working on a policy for methanol blending. It will be announced soon. Its implementation will help cut pollution and fuel cost,” said an official.
The government efforts to promote the use of alternative fuel have, however, achieved limited success so far. Its national policy on bio-fuels had set a target of 20 per cent blending of bio-fuels over the next few years, both for bio-diesel and bio-ethanol. However, India has achieved an average blending rate of close to just 4 per cent (ethanol blended petrol) by the end of 2017.
As in the case of ethanol, it will be a big challenge for the government to ensure the production of enough methanol. While methanol could be imported from foreign countries to meet part of the demand, its local production is essential to reach the required level.
As petrol can be blended with both methanol and ethanol, a right mix could significantly reduce fuel cost for motorists. In the face of sudden spurt in global crude prices, a higher mix of the two alternative fuels could certainly provide cushion in the short-term.