Maharashtra will withdraw the export fee of Rs1500 per kilo litre (Rs1.5 per litre), that it currently charges on ethanol supplies to other states.

This follows the meeting between minister of petroleum and natural gas Murli Deora and Maharashtra chief minister Vilasrao Deshmukh for ensuring successful implementation of the national programme for supply of ethanol blended petrol (EBP) in Mumbai today.

Deora had specifically requested Deshmukh to completely remove the export duty on ethanol so that excess production of ethanol in Maharashtra could be supplied to other states, pointing out that the duty withdrawal would ultimately benefit sugarcane farmers in Maharashtra.

The EBP programme at 5 per cent blending of ethanol with petrol was launched commencing 1st November, 2006 through out the country (except north eastern states, Jammu & Kashmir, Andaman & Nicobar Islands & Lakshadweep Islands).

So far, EBP is being supplied in 11 states and three union territories covering about 70 per cent of the identified States. Out of total requirement of 180 crore litres ethanol for three years, oil marketing companies (OMCs) have already contracted a quantity of 140 crore litres. They have so far procured 19.35 crore litres under the programme as on 31 December 2007.

Speaking the media after their meeting, Deora said that the programme was aimed at contributing to energy security through use of alternative fuels and also help sugarcane farmers to earn additional income. The blended fuel mixture is environment friendly as the oxygenate nature of ethanol ensures greater petrol combustion leading to lesser emission of pollutants.

He disclosed that the programme in some states like West Bengal, Tamil Nadu, Chhattisgarh, Kerala has not be implemented due to procedural impediments which have affected the free movement of ethanol across states.

For ensuring successful implementation of EBP programme the centre has been holding regional level meetings with representatives of various states to sort out these issues, with the prime minister also intervening with state chief ministers.

Deora also reiterated his demand for rationalisating the octroi levied by the municipal corporation in Mumbai on crude oil procured by BPCL and HPCL's refineries, as the levy had put an additional burden on these two companies, when they have already been hit by heavy under recoveries to insulate consumers against high volatility in global crude oil prices.

Deora also expressed satisfaction on the progress made by Mahanagar Gas Limited in expanding compressed natural gas (CNG) and piped natural gas (PNG) infrastructure and supplies in Mumbai and surrounding areas.

Deora also assured Deshmukh that increasing the CNG and PNG supplies in Mumbai in particular and other cities in Maharashtra would be accelerated.

The number of households connected to PNG supplies has reached 3.32 lakh while the number CNG vehicles have now increased to 1.83 lakh. At present Mumbai and the adjoining areas of Thane and Mira Road have 127 CNG stations.

Mahanagar Gas has a CNG infrastructure network of 222km. steel pipelines and 2,180km. polyethylene pipelines.