ISLAMABAD: Former finance minister Miftah Ismail has called for a cautious and well-studied approach to ethanol blending policy to bring down the prices of oil in Pakistan.
He, however, warned against premature decisions without proper evaluation. Commenting on the idea, Miftah said there was no harm in examining the feasibility of ethanol blending, but stressed that policy changes should not be rushed. “It’s always good to take a look and evaluate things, but one should be careful in changing policy,” he said while talking to The News.
He noted that if ethanol production proves commercially viable, sugar mills would naturally move into the sector. “They will get one more market and would hope the price of ethanol will increase,” he added.
Discussing the possible impact on oil marketing companies, Miftah said outcomes would depend largely on government policy. If firms are mandated to blend a fixed percentage, such as 10% ethanol, and given a set price, many could procure ethanol at lower rates and retain the margin as profit.
The former minister suggested that the ministry of petroleum in collaboration with Pakistan State Oil and representatives of the sugar industry, could quickly conduct a basic assessment. “This can be studied within a couple of days, after which options can be worked out,” he said. However, he expressed reservations about immediate implementation, citing practical challenges such as blending mechanisms, required infrastructure, and timelines. “I don’t think it will be feasible and implementable right away,” he remarked.
Miftah linked the economic viability of ethanol blending to global oil prices, saying it becomes attractive when Brent crude oil trades above $100 per barrel. “At normal oil prices of $60 to $80, ethanol is generally not economically viable,” he explained. Drawing comparisons, he pointed out that Brazil has a vast sugarcane and ethanol industry where sugar is often a byproduct, while the Unites States supports ethanol production through large-scale corn farming and policy mandates. While acknowledging that current petrol prices in Pakistan could make ethanol blending appear financially feasible, he cautioned that operational and logistical constraints may limit its practicality in the short term.
