OMCs are buying biodiesel to blend with regular diesel

Indian Oil, Bharat Petroleum and Hindustan Petroleum plan to buy a total of 20 million litres of biodiesel from local manufacturers


Photo: Bloomberg
Photo: Bloomberg

Oil marketing companies (OMCs) are purchasing biodiesel from vegetable oil producers for blending with regular diesel after failing to produce it themselves, three industry officials said.

Biodiesel is extracted from plants such as jatropha, vegetable or animal fat, and mixed with regular diesel to reduce the carbon emissions and cut import dependency.

“We’ve introduced it at our retail outlets in Andhra Pradesh and Kerala, but it is available in a very limited quantity. So, whatever quantity is available, we are procuring that from vegetable oil manufacturers via tenders,” said an official of Indian Oil Corp. Ltd (IOCL), requesting anonymity. IOCL, the country’s largest state-owned oil refiner, did not reply to an email sent on 3 October.

Indian Oil, Bharat Petroleum Corp. Ltd (BPCL) and Hindustan Petroleum Corp. Ltd (HPCL) plan to buy a total of 20 million litres of biodiesel from local manufacturers, a BPCL official said, requesting anonymity. Introducing more biodiesel will help India, which imports 80% of its crude oil, to reduce its oil import bill.

The country is targeting a more than seven-fold expansion in its biofuel market in the next six years, oil minister Dharmendra Pradhan had said on 10 August.

Blending 5% of biodiesel with diesel and 10% ethanol with petrol can expand the biofuel market to Rs50,000 crore by 2022 from about Rs6,500 crore currently.

For this, India would need 6.75 billion litres of biodiesel and 4.5 billion liters of ethanol, Pradhan had said.

“We are looking at sourcing more biodiesel to meet 10% blending norm,” the BPCL official cited above said. BPCL did not reply to an email sent on 3 October.

In 2008-09, the OMCs had planned to cultivate jatropha across more than 180,000 acres in Chhattisgarh, Madhya Pradesh and Uttar Pradesh. But the crop did not yield sufficient oil, and the companies wound down these ventures.

According to Sandeep Chaturvedi, president of Biodiesel Association of India, OMCs are at present selling biodiesel in West Bengal, Orissa, Andhra Pradhesh, Chennai and Gujarat, after procuring it from biodiesel manufacturers and blending it.

Chaturvedi added that to tide over the shortage of bio-diesel, a policy is needed to assure regular supply of used cooking oil from restaurants, hotels and other food processing industries, as cooking oils have a large share in the production of biodiesel and are easily available. Cooking oil accounts for 18-20% of the total output of biodiesel.

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