Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: Nepal could cut petroleum imports and save around Rs 6 billion in foreign currency each year by blending 10 percent ethanol into petrol, Industry, Commerce and Supplies Minister Anil Kumar Sinha said on Sunday.
Speaking at an interaction programme organized in the capital by the Society of Economic Journalists Nepal (SEJON), the minister said the long-discussed ethanol blending policy has now entered the implementation phase following years of study and consultation.
He stated that introducing a 10 percent ethanol blend could reduce Nepal’s annual petrol imports by roughly 130 million litres, helping lower the country’s trade deficit and reduce pressure on foreign exchange reserves.
Policy Approved, Implementation Near
Sinha said the government has already approved the Petrol-Ethanol Blending Order 2082, and the policy is now in the final stage of implementation after publication in the official gazette.
The minister noted that Nepal has studied ethanol blending for nearly two decades, but the policy is only now moving toward execution.
He described ethanol blending as an important step toward cleaner energy and reduced fossil fuel dependence.
“Even a 10 percent blend can significantly reduce petrol imports and save billions in foreign currency,” he said, adding that the move would help retain money earned by Nepali workers inside the national economy.
Agricultural and Industrial Impact Expected
The minister said the policy could stimulate domestic production of raw materials such as sugarcane, expand use of agricultural land, and energize the internal economy through new industrial activity.
He expressed confidence that ethanol production could encourage new factories, generate employment, and create value chains linking agriculture with industry.
However, Sinha acknowledged that major challenges remain, including:
Establishing new industries
Ensuring a secure industrial environment
Creating sufficient jobs
Expanding raw material production
Pricing and Investment Issues Key
The minister stressed that ethanol must remain cheaper than petrol to become competitive in the market. He said the government is preparing operational guidelines to address pricing, supply management, and implementation mechanisms.
Sinha also said the sector could attract foreign investment, but warned that while competition is necessary, unhealthy competition must be avoided to ensure stability and investor confidence.
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