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The Ministry of Petroleum and Natural Gas has said that E20 petrol is currently costlier to produce than pure petrol at prevailing global crude oil prices, but the ethanol blending programme is helping shield Indian consumers from global oil price volatility while strengthening the country's long-term energy security.
In a detailed clarification issued through a set of frequently asked questions on the Ethanol Blended Petrol Programme, the ministry said the economics of ethanol depend on international crude oil prices. It noted that maize-based ethanol is currently procured at around Rs 71.86 per litre, even before GST, transportation, storage and depot handling costs.
"Therefore, if international crude oil is trading at around US$70 per barrel, E20 is actually costlier to produce than pure petrol. If crude rises to US$120-130 per barrel, the economics naturally reverse and ethanol becomes even cheaper," the ministry said.
The ministry added, "The real question is, 'How did India manage to protect consumers from the full impact of volatile global crude prices?'" It explained that nearly 20 per cent of every litre of petrol sold in India today is domestically produced ethanol, reducing dependence on imported crude oil and insulating part of fuel costs from fluctuations in international oil prices. -- ANI
