Use of 100% ethanol as fuel has been mulled for a very long time. How long would it go in cutting down our crude import bill because there is also the fact that not too many automobiles are compatible with ethanol as opposed to regular petrol or diesel or fuel?
It is a very good idea as part of the efforts to reduce dependence on oil imports but would it make a very significant difference? The answer is no because we are a great producer of ethanol but at the same time if we start consuming ethanol for everything, we will end up becoming import dependent for ethanol also. We are already importing quite a bit.
So, it is a very good idea but I personally feel that blending makes more sense. We are already blending up to 10%. It makes more sense as people do not have to go for complete change of the engine or technology change because most motor vehicles can handle petrol and diesel blended with ethanol and my personal opinion is we should focus more on making sure that the blending works and blending up to 10%. We can increase it a little bit more but then eventually we will be going for electric mobility because we should be investing more time, effort, energy, policy, bandwidth and all that on hydrocarbons to electric. That makes more sense to me.
Ethanol is a very good idea for a country like Brazil which is a major producer of ethanol. But food is always a very big issue here in terms of security and also pricing. Ethanol is an option but not such a big option that we should focus on that. But as far as import dependence is concerned, if we want to sustain 8% growth rate or go up to 8% first and then sustain it, we are going to consume more oil.
Demand is going to increase in the region of 3% per annum which means our import dependence on petroleum products or crude oil is not going to come down as such, it is only going to increase. Pre-pandemic we were consuming roughly 5 million barrels a day of oil. It is going to go up to 9 million barrels if we want to become a $10-trillion economy.
Unfortunately import dependence is not going to come down. All that we can do is try to find more oil and gas in our basins in the Bay of Bengal, Arabian Sea onshore and things like that. At the same time, make the best use of ethanol. But ultimately, electric mobility is the answer.
