The Ministry of Petroleum (MoP) and Hydrocarbon Development Institute of Pakistan (HDIP) have strongly opposed blending of ethanol with petrol, saying that the proposition is not viable, economically, for Pakistan and any such decision would leave more surplus hi-octane petrol to financially burden the national kitty.
They said that the economics of ethanol blending would hit Pakistan seriously at a time when it is quickly shifting from costly petrol to cheaper alternative motor fuels such as CNG, LPG and LNG.
Sources said that MoP and HDIP gave a detailed presentation to the Federal Cabinet in one of its meetings and in which they said that Pakistan was already surplus in petrol and, time and again, the government had asked the refineries to operate below capacity, with the object to reduce petrol production.
Sources said that MoP and HDIP contested sugar industry's arguments at the Cabinet level and said that PSMA's idea was not workable. They also apprised the Cabinet that the stakeholders of petroleum sector and auto industry had disagreed with the sugar industry in a crucial meeting.
The strong arguments of HDIP and MoP led to a the conclusion at the Cabinet level that PSMA idea was not worth carrying forward, in any case, and this understanding led to winding up of the proposal.
Sources said that Pakistan Sugar Mills Association (PSMA) had been pushing forward the idea of ethanol blending with petrol for the last many years, basically to get an additional sources of ethanol consumption to make more money from sugar by-product.
PSMA was formally and clearly mentioned by then Petrol Secretary Abdullah Yousaf some time in 2002 that Pakistan was surplus in petrol and its blending with ethanol was not workable.