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Ethanol-Free Petrol Burning Rs 1k Cr For Oil Cos
By Mr Ethanol | November 29, 2007
Economic Times:
The country’s cash-strapped oil marketing companies (OMC) could save a cool Rs 16 on every litre of petrol they replace with ethanol. This adds up to Rs 1,000 crore if just 5% petrol is replaced with ethanol. What’s more, the number could become bigger once local petrol prices are aligned with spiralling global crude oil prices.
While each litre of petrol costs Rs 27, ethanol costs Rs 21.50. After adding taxes, dealer margins and transportation costs, the final cost of petrol for oil companies is Rs 48.33 per litre in Delhi. Ethanol, on the other hand, adds up to a final cost of Rs 31.51. In other words, OMCs save Rs 16.82 on every litre of ethanol they buy instead of petrol.
If OMCs had purchased 560 million litres of ethanol — or 5% of total annual petrol sales — in 2006-07, it would have led to a saving of Rs 942 crore. Even if the government does not raise petrol prices, the companies can easily double the figure from October 2008, when 10% blending becomes compulsory.
Unfortunately, despite the huge potential to save money, OMCs are reluctant to buy ethanol. Till October this year, they had purchased only 140 million litres even though they continue to make a loss of Rs 5.33 on every litre of petrol they sell….
Topics: Ethanol, Industry, News, Oil |
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