The government is considering blending ethanol into petrol, with a newly formed committee tasked to explore this possibility. Headed by the Minister of Petroleum, the committee includes the Minister of Finance, Minister of State for Finance, and the Secretary of the Petroleum Division.
The committee’s mandate includes developing a policy for ethanol-blended petrol, studying international best practices, and analyzing past attempts in Pakistan. The prime minister has set a one-month deadline for the committee to finalize its recommendations.
Despite the government’s initiative, the oil sector remains skeptical about the commercial viability of ethanol-blended petrol. Industry experts cite previous unsuccessful attempts, particularly during the Musharraf administration, due to economic impracticalities for both refineries and the sugar industry, which produces ethanol.
Zahid Mir, CEO of Pakistan Refinery Limited (PRL), explained that while ethanol, produced by the sugar industry, has a high Research Octane Number (RON) and can be used in vehicles, previous attempts failed because it wasn’t commercially feasible. He noted that ethanol fetches a high price on the global market, which local refineries cannot match without increasing the cost of blended petrol. Similarly, the sugar industry prefers exporting ethanol at higher international prices.
Mir highlighted that countries like Brazil successfully blend ethanol with petrol due to their large-scale sugar production. However, increasing sugarcane production in Pakistan to lower ethanol prices could negatively impact other crops, making it an unviable option under current circumstances.