Nepal Aims to Cut Import Bill by Rs 6 Billion Annually Through Ethanol Blending in Petrol

Kathmandu. Minister for Industry, Commerce and Supplies Anil Kumar Sinha stated that blending 10 percent ethanol in petroleum products could reduce Nepal's annual import bill by approximately 6 billion Nepali Rupees.

Speaking at an event organized by the Society of Economic Journalists of Nepal (SEJON) in the capital on Sunday, Minister Sinha informed that the decision to blend ethanol in petrol has reached the final stage of implementation after extensive study and discussion. The government claims this move will significantly help in reducing the country's growing trade deficit and increasing foreign exchange reserves.

Although studies on ethanol blending have been ongoing in Nepal for two decades, the 'Order to Blend Ethanol in Petrol, 2082' has only recently been approved. Minister Sinha clarified that this policy will be published in the Nepal Gazette and implemented soon. Mentioning that blending ethanol in petrol is a significant step towards clean energy, he presented data indicating that this could reduce petrol imports by 130 million liters annually.

He expressed confidence that the large amount of money earned by Nepalis through hard work will be saved from going abroad, and this saving will stimulate a distinct economic cycle at the local level.

Minister Sinha also discussed the government's policy of 'Local Production First Use' aimed at promoting domestic production.

He stated that the policy of using local goods in government offices and purchasing supplies locally for upcoming elections, rather than sending goods from the center, has energized the rural economy. As the demand for agricultural produce like sugarcane for ethanol production increases, it is expected to help expand the use of fallow arable land and increase farmers' income.

Minister Sinha acknowledged that challenges such as establishing new industries, industrial security, job creation, and continuous supply of raw materials in the field of ethanol production and blending still remain. Suggesting the possibility of foreign investment in this sector, he emphasized the need for healthy competition in the market.

He further informed that the government will soon publish the necessary procedures to make ethanol competitive in the market, requiring its price to be lower compared to petrol.