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KARACHI, July 15: The new gasoline (E-10) would be available at Rs59.84 per litre, which is Rs2.48 less than normal petrol which is being sold at Rs62.32.
It is said to be not suitable for older cars.
Pakistan State Oil (PSO) has planned to sell the ethanol blended petrol at 30 outlets in the country, including six in Karachi by Aug 14.
“The company’s main focus of providing E-10 gasoline is for huge population of motorcycles and 800cc cars. It is not suitable for pre-1990 model vehicles,†PSO Managing Director Irfan Qurieshi told Dawn at his office on Wednesday.
Giving the reason, he said out of total sale of 154,000 tons of petrol per month, the two-wheelers consume 55 per cent of petrol. There are around 60 bike-makers, including three big Japanese bike-makers.
When asked how the company would handle if problems occur in vehicles using E-10, he said 50 bikes have been tested with satisfactory results.
He, however, acknowledged that the government did not consult Japanese and Chinese bike and car makers.
“We have not discussed the E-10 gasoline subject with the Pakistan Automotive Manufacturers Association (PAMA).†PAMA in January 2007 had pointed out that ethanol blending should be gradual and the starting point should be three per cent or E-3. It was based on a report that mixing up to three per cent would not affect components of fuel supply system and engine regardless of their design.
The higher than three per cent ethanol content in the fuel may adversely interact with rubber and metal parts and may also negatively affect the performance of the vehicle. “PAMA still holds this concern,†an official in the association said. Meanwhile, PSO plans to invest $3.4 billion by 2010 in order to sell ethanol blended petrol at its 2,200 retail outlets country-wide. The investment is related to infrastructure development at pumps and depots.
Petrol import The 10 per cent substitution by ethanol would result in reducing import of petrol by 154,000 tons resulting in foreign exchange saving of up to $96 million. The country had imported 270,000 tons of petrol in 2008-2009, he said.
When asked about the haste with which the government moved on E-10 and reservations of sugar mills on the initiative, PSO MD told Dawn that “work on the project had actually been initiated in March 2008.†He added that sugar mills were not against the project but they had some reservation on the price of ethanol.
Oil and Gas Regulatory Authority (OGRA) would determine the price of ethanol blended petrol. The Authority is reported to have preferred purchase price of ethanol at Rs36-37 per litre from distilleries but hopefully the price of ethanol may range between Rs40 and 45 per litre.
Around 16 distilleries are producing 400,000 tons of ethanol per year. PSO will issue tender for purchase of ethanol from sugar mills.
Quality About quality, he said the company would receive ethanol at three non- (inland freight equivalization) depots where it will be blended with gasoline and stored as E10.
In a presentation to the President on July 9, the PSO had some concerns, like assured supply of 98.8 per cent minimum strength ethanol on consistent basis, any change in motor gasoline or ethanol base will have corresponding effect on E-10 gasoline and two grades of petrol may lead to adulteration and malpractices. On regulatory support from the government, he said President Zardari assured full support when some points were raised during the presentation, like exemption required from Department of Excise and Taxation on ethanol storage licence / monitoring and supervision, excise permit, inclusion required in existing explosive licence relating to storage of ethanol and its blending and marketing, besides exemption needed from tendering procedures for procurement of ethanol.
The presentation said that Ogra has to devise an economical and workable formula for pricing of E-10. Price differential of minimum Rs3 between regular petrol should be maintained irrespective of price change of either component.
Export of ethanol should be allowed only after meeting local requirement as a component of E-10 gasoline.
Ethanol also enhances performance of the engine through lead removal as it posses high octane rating for better fuel economy. It also offers a way to reduce green house gas emissions from transportation sources.
The research has determined that ethanol presents less of pollution risk to drinking water, he said.
It would also benefit the farmer, who would feel attracted to grow more sugarcane and get adequate compensation.
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