Railways plan to cut diesel in limbo

New Delhi: The ambitious plan of the railways to cut down its diesel bill by mixing bio-diesel appears to have hit a roadblock. The oil marketing companies have informed the railways that the five per cent mixing of the bio-diesel could not be possible at the prevailing rate. The railways has taken up the issue with the ministry of petroleum, after the oil marketing companies communicated their unwillingness to provide the bio-diesel, sources said.  

The railways, incidentally, had approached three PSU OMCs. However, they wrote back, saying that it would not be feasible to supply bio-diesel at the prevailing rate, because of the regulatory barriers, sources said. Union minister of railways V. Sadanand Gowda in his maiden Rail Budget has stated that the railways would seek five per cent blending of diesel with bio-diesel. Roughly, the 60 per cent of the network of the railways operate on diesel, while rest being electrified runs on electricity.

Union surface transport ministry Nitin Gadkari has also been strongly advocating 15 per cent blending of ethanol in petroleum products. Union minister for food and consumer affairs Ramvilas Paswan too has agreed in principle that there should be 15 per cent ethanol blending.  

However, no mechanism to implement the government intention has yet been evolved. The OMCs in their letter to the railways noted that the supply of bio-diesel (B100) is subjected to procurement of pure bio-diesel by oil ministry, which is covered under Bio-diesel Purchase Policy of October 2005.

“This policy provides for procurement of B100 at designated centres of an oil company at a price fixed by the oil industry, which is reviewed every six months. The current price, effective from April 2014 is '45 per litre. But no bio-diesel producer has approached the oil industry for registration at price fixed under the policy so far,” the OMC told the railways.