Who Will Benefit?

Although the government claims to have invited entrepreneurs to apply for ethanol interest subvention scheme to set up ethanol manufacturing units, it’s obvious that the private oil mega corporations will eventually control the manufacturing of ethanol. There is no clarity in the policy report about the eventual cost of petrol which is indicative that the benefit of reduced cost of blended petrol not be passed on to the customer and will remain with the oil and ethanol companies.

The Road Ahead

In 2017, Transport Minister Nitin Gadkari shocked the automobile industry (and the world) when he announced that he intended for India to move to 100% electric cars by 2030.

In 2018, he did a U-turn and reduced his government’s targets to 30%. This U-turn was a result of pressure by petrol vehicle manufactures and especially from oil companies who are resistant to change and who have been benefiting from the current high petrol prices.

The government’s dependence on excise duty on petrol to meet the facial deficit is another roadblock in the move towards EV. But what the government doesn’t realise is that ethanol blended fuel will provide a negligible reduction of carbon emissions as compared to electric power from solar energy. The taxpayer money wasted or lost on blended fuel can be instead used to set up solar energy generation plants that can provide low cost energy to the next generation of vehicles.