Petroleum Division set to approve ethanol-blending policy

The Petroleum Division is ready to approve a new policy that will mix ethanol with petrol to reduce the country’s reliance on imported fuel and promote renewable energy.

The plan suggests blending up to 10 percent ethanol with petrol.

The proposal, inspired by India’s successful ethanol program, will be presented to the Economic Coordination Committee (ECC) of the Cabinet for approval. India’s program has helped cut oil imports, and the country aims to reach a 20 percent ethanol blend in petrol.

A government committee, led by the Minister of Petroleum and the Finance Minister, was set up by Prime Minister Shehbaz Sharif on June 23, 2024, to develop the national ethanol strategy. The committee has finalized the plan, which encourages oil refineries to voluntarily mix up to 1-5 percent ethanol with petrol at first.

The policy will not be mandatory for oil companies or refineries, but they will be encouraged to participate. In 2009-10, Pakistan tried a similar program, E-10 petrol (10 percent ethanol), in Sindh and then in Punjab, but it was stopped after a year due to limited ethanol supply, car manufacturer concerns, and rising ethanol prices.

The new policy will be managed by a government committee, which will check its progress every six months and make changes if needed. The long-term goal is to increase ethanol production and explore other sources besides sugarcane molasses. The government is also working with car manufacturers to develop engines that can handle higher ethanol blends.