Mumbai: Union minister Nitin Gadkari is betting big on alternative fuels that will not only cut India's burgeoning crude oil import bills but also create additional sources of income for farmers, who comprise more than 50 per cent of the country's population.


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Alternative fuels are cleaner and cheaper, the Union minister for road transport and highways said.


Speaking to PTI, Gadkari said the use of ethanol, methanol, bio-compressed natural gas, dimethyl ether and electricity should be increased as alternatives to crude oil, 70 per cent of which has to be imported.


"The benefit of these alternative fuels is that its raw material is available in the country and can be sourced in large quantities from the agricultural sector. It will help farmers increase their income too," Gadkari said.


Speaking about the financial strain crude oil imports place on the country, Gadkari said: "We spend Rs 7 lakh crore annually to import crude oil. The economy is facing challenges - one of which is the heavy crude import bill. The fall in the value of rupee against US dollar is also related to this."


He said increasing production of oil within the country has its limitations, adding that imports comprise 70 per cent of crude oil demands while domestic generation stood at only 30 per cent.


"At present, ethanol is received from sugar mills and we mix 5 per cent of it to petrol. This mix can be raised up to 22 per cent but we do not produce ethanol in large quantity. Currently, we get about 4 per cent ethanol after crushing one tonne of sugarcane," Gadkari said.


He said the government has allowed the use of B-heavy molasses for ethanol production to increase its production.


"Once ethanol availability goes up, we can blend more of it with petrol," Gadkari said.


He, however, is not satisfied with these small steps. He said he has decided to go for vehicles which are capable of running on 100 per cent ethanol or methanol.


"The US and Canada make flex-engines (dual fuel engines) for buses and other transport vehicles. We can use 100 per cent petrol or ethanol in the same engine. The policy is ready for it. Its implementation will start in a few months," he said.


He cited Nagpur as an example where 35 public transport buses are powered by ethanol.


The minister said private transport vehicle manufacturer Bajaj Auto was set to launch its vehicles that will have flex-engines.


Listing his plans to increase the production of ethanol, Gadkari said the government has decided to make ethanol from cotton straws, rice, bagasse, bamboo and municipal waste.


"Once we remove metal, glass and plastic, the rest is biomass, which can be used for ethanol. We have made a policy for it as well," he said, adding that one of the reasons for Delhi's air pollution was the burning of straw by farmers.


"Once we start making ethanol out of it, no farmer will burn it. And this will decrease air pollution as well," he said.


The minister's second choice for an alternative fuel is methanol, a product that can be obtained from coal. "We have coal fields and we can produce methanol in abundance. We can sell it at Rs 22 per litre. In China, methanol sells at Rs 13 per litre," he said, adding that companies such as Deepak Fertiliser, state-run RCF and Assam Petroleum produce methanol.


"Mercedes and Volvo have decided to give 10 buses each for Guwahati and Mumbai as part of a pilot project and these will run on 100 per cent methanol," he said.


He added that both ethanol and methanol cause less pollution when compared to petrol and diesel.


"While producing methanol, DME (dimethyl ether) gas is also obtained and this can be mixed with LPG and used as a cooking fuel. In the US, 20 per cent DME is mixed with LPG. If we do the same here, we can bring down prices by Rs 50 to Rs 60 per cylinder," Gadkari said.


"You have a methanol economy in China and Israel. Why not in India?"


Electricity was another option, he said and added that his ministry is in favour of running electric buses.


Talking about the mathematics behind the move to go in for alternative fuels, Gadkari said: "Diesel today costs around Rs 60 (per litre), petrol around Rs 80, ethanol is at Rs 47 and methanol at Rs 22. The per unit cost of electricity is Rs 10. The equation is simple and clear."


These alternative fuels, he said, were cleaner and would also bring savings to people.