Govt eyes big push for flex fuel vehicles amid turmoil in global oil market

Government of India plans to promote flex-fuel vehicles and higher ethanol blending up to 85 percent, holding stakeholder meetings to reduce crude oil imports, enhance energy security, and respond to global oil market disruptions driven by Middle East conflict ongoing

New Delhi: The government is looking at stepping up efforts to promote Flex Fuel Vehicles (FFVs) as it looks to deepen ethanol use in the transport sector amid disruptions in the world oil market due to the Middle East conflict.

The Ministry of Petroleum and Natural Gas (MoPNG) is scheduled to hold a key stakeholder meeting on Monday to chart out a road map for adopting FFVs in India, according to reliable sources. The meeting, to be chaired by the Additional Secretary at MoPNG, will be attended by representatives from Oil Marketing Companies (OMCs) including Indian Oil, Bharat Petroleum and Hindustan Petroleum, automobile manufacturers and other stakeholders.

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Discussions are expected to focus on policy measures required to expand ethanol blending with fuels beyond the current mandate. India at present follows an E20 programme, under which petrol is blended with 20 per cent ethanol.

The government is now exploring options to move towards FFVs capable of running on ethanol blends of up to 85 per cent. The renewed push is being considered to cut India’s dependence on oil imports and enhance energy security given the uncertainties in the global oil market.

India currently imports over 85 per cent of its crude oil which makes the economy vulnerable to global shocks in the oil market. The Government is, therefore, keen to reduce dependence on oil imports Meanwhile, the country’s target of blending 20 per cent ethanol with petrol was advanced from 2030 earlier to Ethanol Supply Year (ESY) 2025-26 due to the rapid expansion.

The Government has been promoting blending of ethanol in petrol under the Ethanol Blended Petrol (EBP) Programme wherein Public Sector OMCs sell ethanol blended with petrol. In order to ensure availability of feedstock for ethanol production to achieve 20 per cent Ethanol blending target by the Ethanol Supply Year (ESY) 2025-26, the Government have taken several steps which include expansion of feedstock for Ethanol production, development of maize clusters around ethanol plants to increase the production of maize in catchment area of grain based distilleries.

The Government has also approved allocation of 52 Lakh Metric Tonne (LMT) of surplus Food Corporation of India (FCI) rice for ethanol production, each for the ESY 2024-25 (from November 1, 2024 to October 31, 2025) and ESY 2025-26 up to June 30, 2026, and diversion of 40 LMT of sugar for ethanol production allowed for the ESY 2024-25.

Further, to boost ethanol production as well as supply in the country, the Government has introduced administered price mechanism for Ethanol procurement under the Ethanol Blended Petrol (EBP) Programme, lowered GST rate to 5 per cent for Ethanol for EBP Programme.