Kathmandu: The government has approved the blending of 10 percent ethanol in petrol with the aim of reducing fuel imports and promoting cleaner energy use. The decision was taken after the Cabinet endorsed the “Order on Using Ethanol Blended Petrol, 2082 BS,” allowing Nepal Oil Corporation (NOC) to mix ethanol with petrol and sell it in the domestic market, reported My Republica.
Although discussions on blending ethanol into petroleum products began more than two decades ago, the plan had not been put into practice until now. With the new approval, authorities estimate that petrol imports could be reduced by around seven million liters.
NOC Managing Director Dr Chandika Prasad Bhatta said the process would now move ahead formally. Once the corporation receives the Cabinet-approved procedures, it will develop the required framework for ethanol production and procurement. He said the decision provides a legal basis for domestic ethanol production and its use in petrol, which will help lower dependence on imported fuel.
He also noted that ethanol use is environmentally friendly and can contribute to cleaner air. However, setting production standards and quality measures for ethanol will take some time. He added that ethanol will not be imported and that domestic production would help create employment opportunities.
Nepal currently imports fuel from India, where ethanol-blended petrol has been in use for years. Officials estimate that blending ethanol could reduce annual petrol imports by about Rs 6.25 billion.
Ethanol is a combustible substance that helps lower engine emissions and reduce pollution. Its use is seen as a step toward protecting the environment. Since ethanol is made from agricultural products, officials say its production should be encouraged to support farmers’ incomes. Raw materials for ethanol include sugarcane, crop residue and dried grasses.
Reducing petrol imports through ethanol blending is also expected to save foreign currency. Although a policy to blend ethanol into petrol was introduced in 2060 BS, the lack of procedures and effective implementation had stalled the plan.
Once ethanol is produced according to required quality standards, NOC will be able to blend 10 percent ethanol directly into petrol stored at its depots. Studies by the corporation suggest that this could reduce daily petrol consumption by around 400,000 liters.
The government announced the ethanol blending plan in the current fiscal year 2025-26 budget as part of efforts to reduce pollution and fuel imports.
Petroleum sector stakeholders say that even as the government promotes electric vehicles, ethanol blending requires careful discussion. They note that while blending is feasible, it must be implemented with due attention to consumer safety and environmental protection.
