Bio-diesel to be sold directly to consumers, now on

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Centre is on a reform-spree and this time it has cut the "red tape" related to the sale of Bio- diesels in the country.

From now on, private manufacturers of bio-diesel can sell their product directly to consumers - public and private, big and small.

Introduction

  • Earlier Even the bulk-user 'Indian Railway' was so far barred from directly purchasing such fuels as the law limit that right exclusively to state-owned oil firms.
  • As for the private sector, only those firms investing Rs 2000 crore in oil infrastructure were allowed to sell petrol and diesel (including bio-fuel).
  • In coming days, the Rs 2000 crore investment barrier will also be relaxed to allow more private consumers to avail this benefit.

Reason behind the move

  • Price of diesel is already deregulated and determined by the market, and it made no sense in restricting private manufacturers in deciding who to sell to.
  • The move is expected to boost the production and use of bio-diesel in the country.

Bio-diesel

  • Bio-diesel is combination of bio-fuels and diesel and is used to power several automobiles.
  • The quality of all the fuels have to be in line with the standard set by Bureau of Indian Standards (BIS).
  • The maximum percentage allowed for bio-fuel to be mixed with 'High Speed Diesel' will continue to be five percent of the mixture.

Moreover

  • The laws to be amended are: Motor Spirit (MS) and High Speed Diesel (HSD) control order for regulation of Supply, Distribution and Prevention of Malpractices.
  • The amendment to this 2005 law will allow private biodiesel manufacturers, their authorised dealers and Joint Ventures of Oil Marketing Companies (OMCs) authorized by the Ministry of Petroleum & Natural Gas (MoPNG) as dealers and give marketing/ distribution functions to them for the limited purpose of supply of bio-diesel to consumers.
  • Now, heavy consumers of diesel like Indian Railway can easily and directly buy bio-diesel
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