KATHMANDU:- Preparations are underway to immediately implement the policy of mixing 10 percent ethanol in petrol in Nepal.

In the programme on ‘Ethanol Blending Policy in Nepal: Opportunities, Challenges and Implementation Strategy’ organised here today by the Society of Economic Journalists Nepal (SEJON), representatives from the government and the private sector have emphasised the need to quickly implement the policy of ethanol blending in petrol.

Minister for Industry, Commerce and Supplies Anil Kumar Sinha stated that the decision to mix ethanol in petrol has reached the implementation phase after extensive study and discussions.

“Study and discussion on this matter had been ongoing for almost 20 years. All studies have now been completed and the Order to Mix Ethanol in Petrol-2082 has been approved. The policy will soon be published in the Gazette and will be implemented,” he said.

Minister Sinha said that mixing ethanol with petrol is an important step towards clean energy and claimed that mixing 10 percent ethanol could reduce petrol imports from Nepal by about Rs six billion annually. He argued that implementation of this measure will help reduce the trade deficit.

The Minister for Industry, Commerce and Supplies expressed his belief that ethanol production would increase agricultural products like sugarcane, expand the use of agricultural land, and help stimulate the domestic economy.

He however acknowledged that there are challenges in areas such as establishing new industries, industrial environment, safety, employment, and raw material production.

Minister Sinha mentioned that there is potential for foreign investment in this area and emphasised that while competition is necessary, unhealthy competition should not occur. He suggested that for ethanol to be competitive, its price should be lower than petrol and for that, the procedure on this will be brought soon.

Secretary at the Office of the Prime Minister and Council of Ministers, Govinda Bahadur Karki, said that many commissions and recommendation committees had been formed in the past for ethanol blending in petrol. He shared on the occasion that an order regarding ethanol blending had come from the government based on the recommendations of those commissions and committees.

Secretary Karki stated that the idea of blending ethanol with petrol is in the country’s interest after analysing the positive and negative aspects of all types of fuels. He expressed the confidence that the government formed after the House of Representatives elections will also continue with this policy.

Executive Director of Nepal Oil Corporation, Chandika Prasad Bhatta, said the programme of blending ethanol with petrol, which has been prepared for a long time, has now reached the implementation stage and clarified that they will not back down from implementing the decision.

According to Executive Director Bhatta, it may take one to one and a half years for the programme to be fully implemented. He said preparations are underway as standards for ethanol quality need to be established.

Joint Secretary of the Ministry of Industry, Shivaram Pokharel, said that the Council of Ministers had decided last December on the policy to blend 10 percent ethanol in petrol, stating that so far there has been no commercial production of ethanol in Nepal.

He added that however this order has opened the way for production. He informed the interaction that the government would soon recommend the minimum price of ethanol, set quality standards, and initiate the process of inviting bids for production.

According to him, after the ethanol blending order is published in the Gazette, a pricing committee will be formed and companies will be selected based on production capacity.

“Since this is a new subject, it takes time to implement, but we have moved forward by studying the practices of various countries,” he said.

Private sector call for favourable environment

Representatives of the private sector have said that while there is enough raw materials to produce ethanol, a favourable environment is needed to establish the ethanol industry.

Chairman of Kian Chemical Industries Limited, Bed Prasad Kharel, emphasised the need to strengthen government mechanisms, noting that investors have to face administrative hassles.

Shashikanta Agrawal, the President of Nepal Sugar Manufacturers’ Association, said that although about 240 thousand metric tonnes of sugar is consumed annually in Nepal, only about 200 thousand metric tonnes is produced domestically.

He stated that there is a possibility of becoming self-reliant within two years and that even though there is a decision on ethanol blending, the procedure and implementation plan are not clear.

Consumer rights activist Madhav Timalsina emphasised that when implementing the ethanol blending programme, price, quality and market regulation should be clear.

“We need to assess what we require and whether the existing mechanisms can handle it or not,” he said.

He stated that clear arrangements for ethanol price fluctuations, regulation and supervision are necessary.

“Without quality production and effective market regulation, the goal of import substitution will not be achieved,” Timalsina said and stressed on clear policies related to the price, quality and measurement of ethanol.