Er.energyNP@Gmail.com

The government has implemented a new policy to introduce the use of ethanol-blended petrol. The “Order Related to the Use of Ethanol Blending in Petrol, 2025/2026 issued by the Council of Ministers was published in the official gazette on Friday.

Through this order, the government aims to promote industries based on domestic raw materials, create employment, increase the use of agricultural and biological resources, and reduce dependence on imports in the energy sector.

According to the order, Nepal Oil Corporation must blend up to a maximum of 10% ethanol per liter of petrol, depending on availability. The order also allows the Council of Ministers to adjust (increase or decrease) this blending ratio as needed.

Raw materials that can be used for ethanol production include molasses, Napier grass, agricultural and forest-based organic waste, straw, corn cobs, wheat husk, cassava, spoiled grains, yeast, and other necessary chemicals.

To prevent the misuse of food supplies, the order also stipulates that grains normally used as food cannot be used for ethanol production.

Industries must produce ethanol only from the raw materials specified under prevailing laws, and the ethanol produced must be sold exclusively to the Nepal Oil Corporation.

The order states that industries must adopt environmentally friendly measures in the production process, maintain quality standards, and conduct quality testing through their own laboratories. The Corporation will also purchase ethanol only after testing the quality of each tanker.

The price of ethanol will be determined by the government based on the recommendation of a committee before the start of each fiscal year. If the price has not been set, the previous year’s price will remain in effect. The determined price will come into force every year from July 17, 2025.

Nepal Oil Corporation must sign agreements with industries for the purchase of ethanol, and the industries must supply the required quantity of ethanol daily at the designated place and time. If an industry violates the agreement, there is a provision allowing compensation to be claimed according to prevailing laws.

The responsibility for transporting ethanol has been assigned to the industries. The order states that because ethanol is highly flammable and absorbs water, strict safety standards must be followed during transportation.

The ministry will prepare and implement standards for the safe storage, blending, and transportation of ethanol.

Kantipur