KARACHI: The government is exploring the possibility of blending ethanol into petrol, with the prime minister forming a committee to investigate this prospect. The committee, led by the minister of petroleum, includes the minister of finance, minister of state for finance, and the secretary of the Petroleum Division.
This committee will develop a policy for ethanol-blended petrol, acting under specific terms of reference (TORs). It will study international best practices and analyze previous attempts in Pakistan to blend ethanol into petrol. The committee aims to create a concrete plan and policy for the production and supply of ethanol-blended petrol in the country, with a one-month deadline to finalize its recommendations.
However, the country’s oil sector remains skeptical about the plan’s feasibility. The sector believes that blending ethanol into petrol is not commercially viable for refineries or the sugar industry, which produces ethanol. Past attempts, especially during the Musharraf government, were unsuccessful due to similar concerns.
Zahid Mir, CEO of Pakistan Refinery Limited (PRL), explained that ethanol is a high-RON chemical produced by the sugar industry, which can be blended with petrol for motor vehicles. However, previous efforts failed as the process was not commercially feasible for either the oil sector or the sugar industry. Mir noted that ethanol fetches a high price in the global market, which local refineries cannot afford, leading to higher petrol prices if blended. Additionally, the sugar industry prefers exporting ethanol at higher prices rather than selling it locally at lower rates.
Mir highlighted that while Brazil successfully blends ethanol with petrol due to its large sugar production, increasing sugarcane production in Pakistan to lower ethanol prices would negatively impact other crops, making it an unviable option in the current scenario.
