Indian Transport Minister wants cars to run on biofuels to reduce oil bill
Mumbai: Union transport minister Nitin Gadkari Friday pushed for greater usage of biofuels to reduce India’s annual oil import bill, putting the onus on local carmakers to make more vehicles that can run on fossil-fuel substitutes. India imports more than four-fifths of its crude oil needs.
The minister’s exhortation comes a day after the GST Council recommended reducing the producer levy on biofuels to 12% from 18%, a move seen to simultaneously support the farm sector and use cash saved on oil imports to help achieve New Delhi’s social-sector objectives.
Gadkari told top banking and capital-markets experts during a discussion at the ET Markets Pre-Budget Meet in Mumbai on Friday. “We don’t need a timeframe. This is going to happen regardless of whether our auto industry likes it or not. They have to accept it.”
‘Industry Ready for Challenge'
The commodity dwarfs all others in the country’s shopping basket. Increasing overseas dependence on crude oil, particularly during periods of tightening supplies and rising prices, typically widens India’s current account deficit while putting pressure on the currency and interest rates.
On his part, the managing director of India’s biggest tractor maker Mahindra & Mahindra said that the industry is ready to accept the challenge, which is seen as the starting point in the country’s eventual transition to an all-electric fleet by 2030.
“We had the biofuels programme in Mahindra, but the lack of biofuels availability back then had led us to defer it,” said Pawan Goenka, who was also attending the event. “You will soon see a lot of vehicles running on biofuels. This is a very big incentive to introduce the technology which will ultimately reduce oil import costs.”Biofuels are often used as gasoline substitutes in the US and Brazil, where increasingly vehicles are manufactured to run both on traditional fossil fuels and greener energy.
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