The petroleum import bill is currently about 14 billion dollars (about 30% of total import bill) and the current yearly consumption of diesel oil in India is approximately 40 million tonnes forming about 40% of the total petroleum product consumption. The ongoing economic expansion (GDP growth is currently about 5%) would increase the demand for transportation fuel in short and medium term at high rates. India's developmental objectives base themselves on economic models that require a per capita consumption of fuel oil several fold higher than current Indian consumption levels. The environmental problems that might crop up from such increased fuel consumption also need to be taken into account.
Indian Railways (IR) entered into a tie-up with Indian Oil Corporation (IOC) for production of bio-diesel to its locomotives. IR have already tested the bio-diesel fuel supplied by IOC and the trial run on the diesel loco hauling Shatabdi Express between New Delhi and Amritsar and the test has been successful.
The Government of India envisages cultivation of several species of oil-bearing trees (mainly, Pongamia and Jatropha) for the above purpose on wastelands by farmers and marketing of oil bearing materials by companies for processing and is gearing up to put development and use of bio-fuels with the dual purpose of cutting the import bill and creating employment opportunities in rural areas.
The potential demand for Petro Diesel and Biodiesel at different blending rates is estimated as under:
|Year||Petro Diesel||Biodiesel @ 5%||Biodiesel @ 10%||Biodiesel @ 20%|
Source: Planning Commission, Government of India