Necessity is the mother of all inventions. It was the 1970 oil crisis that forced Brazil to start looking for alternative sources of fuel and they came up with ethanol. The initial success of Brazil’s ethanol programme was mainly due to the Govt’s subsidy policy. What was India doing then? Well, it was only after 10 years India had their first Maruti Suzuki and Hero Honda. So the oil crisis in the 70’s would not have that much impact to push the Govt. to think about alternate fuels then.
However, since the economic liberalization, the arrival of new models and more affordable finance schemes resulted in the phenomenal growth of cars and bikes in India. Add to that the competition in the automobile industry also pushed the prices southwards. Just imagine the kind of growth, the passenger car segment will witness once the proposed Tata’s one-lakh car hit the market. All this growth in the two wheeler and four wheeler sales led to India being one of the major oil-consuming nations in the world now.
So what India is doing now? Government is keenly planning for gas pipelines from countries like Iran and Burma, companies like ONGC and Reliance are spending billions of dollars in deep-sea oil exploration. On the other hand, another BRIC nation Brazil, now met 40% of its energy needs thru ethanol, this time without any subsidy. There are even cars that are running with 100 percent ethanol fuel there.
In contrast, Indian Govt. is still not committed to the mandatory blending of ethanol, which it planned some 5 years ago. This lack of strong will from the Govt. is forcing top ethanol manufacturers in India like Bajaj Hindusthan to look for opportunities overseas. As the Brazilian success proves, for the alternative fuel programme to be successful, it is imperative for the Government to support them through the initial phases by favorable policies and subsidies.
Other than the economic benefits, these bio-fuels are also environment friendly and can help to keep the pollution levels in check. With all these advantages, if the Government takes firm steps towards promoting bio-fuels, sooner we will be able to bid adieu to the oil age.
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