Government Scraps Ethanol Blending Project: Will Diesel Get Costlier Now?

Ethanol-Blended Diesel: The government has cancelled the plan to blend ethanol with diesel because tests revealed that adding ethanol significantly lowers the diesel's flash point. Consequently, the project will not be taken forward.

Ethanol-Blended Diesel: The government has currently halted plans to blend ethanol with diesel, following similar initiatives for petrol. Tests conducted by oil marketing companies revealed that blending ethanol with diesel compromised a critical safety standard. As a result, the government decided against proceeding with ethanol-diesel blending. The key question now is whether this decision could lead to higher diesel prices in the future.

Why was ethanol-diesel blending halted?

Suresh Gopi, Minister of State for Petroleum and Natural Gas, informed the Rajya Sabha that state-owned oil companies had conducted tests—through their research and development centers—by blending varying amounts of ethanol with diesel. These tests involved oil companies alongside laboratories and automobile manufacturers. The tests revealed that adding ethanol to diesel significantly lowers its flash point. The blended diesel failed to meet the required flash point standards, prompting the government to decide against advancing the scheme.

What is a flash point?

The flash point is the temperature at which a fuel releases enough vapor to ignite. If a fuel's flash point drops significantly, the risk of fire during storage, transportation, and handling increases. For this reason, the government does not wish to take any safety-related risks regarding diesel.

Will diesel become more expensive now?

The government cancelled the ethanol-diesel blending plan because safety-related issues emerged during testing. This decision does not imply an immediate rise in diesel prices; the cost of diesel depends on various factors. This includes factors such as international crude oil prices, the rupee-dollar exchange rate, refining and transportation costs, taxes, and the pricing policies of oil companies.

What was the need to blend ethanol with diesel?

Ethanol is produced from sugarcane and other agricultural products. Blending ethanol with petrol reduces dependence on crude oil imports and boosts the use of domestically produced fuel. Consequently, the government has long been promoting ethanol blending in petrol.

Will ethanol-blended petrol be discontinued?

While the blending of ethanol with diesel has been stopped, India has not completely abandoned ethanol blending. Ethanol blending at a 20% level will continue in petrol, and it will remain readily available.