Oil Ministry opens National Bio-fuel Centre – The Hindu Business Line, New Delhi, March 14, 2006

The Petroleum Minister, Mr. Murli Deora, said that the Petroleum Conservation Research Association (PCRA), an organisation under the Ministry of Petroleum and Natural Gas, has opened a National Bio-fuel Centre, which disseminates information regarding different activities on bio-diesel.

The bio-diesel industry is at a nascent stage and the cost of production of bio-diesel would vary for different producing units, the Minister said in the Rajya Sabha today. Oil marketing companies (OMCs) have offered to purchase the bio-diesel at the delivered price of Rs.25 per litre.

This will be done at specified locations effective from January 1, 2006 for a period of six months, considering this to be the viable price for mixing bio-diesel with diesel and selling the mix in the market.

This price is considered viable for producers of bio-diesel and comparisons with imported fuel would not be appropriate, the Minister said.

As regards initiatives already taken for the promotion of bio-diesel, Mr. Deora said, the Ministry of Rural Development is the nodal Ministry for the proposed National Mission on bio-diesel, being set up with focus on large-scale plantation of Jatropha cultivation.

A detailed project report (DPR) on the National Mission has been submitted by that Ministry to the Planning Commission, which, inter-alia, envisages a demonstration project, involving plantation of Jatropha in four lakh hectares of degraded forest and non-forest lands for manufacturing bio-diesel.

The Planning Commission has given `in principle' approval to the DPR on demonstration phase estimated to cost Rs.1, 286 crore over a period of five years, the Minister said.

Purchase Policy

With a view to encourage production of bio-diesel in the country, his Ministry has already announced a Bio-Diesel Purchase Policy, in October last year, which is effective from January 1, 2006, Mr. Deora said.

The Policy identifies 20 purchase centres of state-owned OMCs where these companies would purchase bio-diesel, which meets the standards prescribed by the Bureau of Indian Standards, from those bio-diesel manufacturers who register them after satisfying the technical specifications, at a delivered price of Rs.25 per litre. The price will be reviewed by OMCs every six months, he said.