The Union Cabinet chaired by the Hon’ble Prime Minister, Shri Narendra Modi, gave its approval for amending the Motor Spirit (MS) and High Speed Diesel (HSD) control order for Regulation of Supply, Distribution and Prevention of Malpractices dated 19th Dec 2005. The amendment will allow private biodiesel manufacturers, their authorised dealers and Joint Ventures (JVs) of Oil Marketing Companies (OMCs) authorized by the Ministry of Petroleum & Natural Gas (MoP&NG) as dealers and give marketing/ distribution functions to them for the limited purpose of supply of bio-diesel to consumers.
MoP&NG announced a Bio-diesel Purchase Policy, effective from 1st Jan 2006, to encourage production of bio-diesel in the country for blending it with diesel with the objective of increasing energy security and meeting other emission and environment objectives. Under this Policy, OMCs are to buy Bio-diesel (B100), meeting fuel quality standard prescribed by the Bureau of Indian Standards (BIS), at a uniform price, as decided by the OMCs from time to time, for blending with HSD to the extent of five percent, at identified purchase centres across the country.
Public Sector Undertakings (PSU) OMCs under the MoP&NG have been actively pursuing the bio-diesel programme and entered into MoUs and formed JVs for cultivation of bio-fuels species on revenue wasteland and degraded lands in the State. These JV companies have been formed with the objective of increasing production and marketing of Bio-diesel in the country. They have sought permission to undertake activities like sourcing, trading, supply, distribution, marketing etc. of Bio-diesel to consumers.
Warm regards,
Dr. S P Sharma
Chief Economist & Director-Research
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