Highlights

• 10 percent ethanol blend in petrol approved by the cabinet, slated for imminent rollout.
• Ministry of Industry, Commerce and Supplies to issue the implementation order this month.
• Expected cut of 13 crore litres of petrol imports per year, saving roughly 6 billion rupees in foreign exchange.
• Raw material pipeline anchored on molasses, corn husk, wheat straw and sisal taro.
• Stakeholders warn of pricing, supply‑chain and quality‑control challenges ahead.

Government Sets the Stage

Kathmandu – The cabinet, chaired by Anil Kumar Sinha, Industry, Commerce and Supplies Minister, announced that the long‑awaited ethanol‑petrol blending policy will move from paper to practice. The minister referenced the Ethanol Mixing Order‑2082, already cleared by the council of ministers in the last Poush, and said it will be gazetted shortly. That matters because the legal seal triggers the procurement, pricing and quality‑monitoring mechanisms.

What the Blend Means for Fuel

Blending 10 percent ethanol into regular petrol is not a cosmetic tweak. It lowers the calorific value slightly, but the higher octane rating can improve engine efficiency. The Ministry assures that the blend will meet a 99.5 percent purity threshold, with continuous lab checks at designated stations. Drivers can expect the same pump feel – the difference shows up in reduced carbon output, not in a sudden loss of mileage.

Key benefits:

• Cuts annual petrol imports by 13 crore litres.
• Saves about 6 billion rupees in foreign‑exchange outflow.
• Generates a new market for ethanol producers and creates rural jobs.
• Lowers tail‑pipe CO₂, supporting Nepal’s climate commitments.

Potential drawbacks:

• Ethanol is cheaper than petrol only if production scales quickly.
• Quality‑control lapses could affect engine performance.
• Farmers may face competition for feedstock if demand spikes.

Economic Ripple Effects

The minister framed the move as a clean‑energy milestone. By sourcing ethanol domestically, Nepal can keep more money within its borders. The projected foreign‑exchange saving could be redirected to local development projects, a point the minister highlighted during the press briefing.

A senior official from Narayani Sugar Mill explained that molasses, a by‑product of sugar processing, will be the primary feedstock. The sugar industry, corn husk, wheat straw and sisal taro are also earmarked, ensuring a diversified supply base.

Raw Material	Annual Potential (litres)	Key Supplier
Molasses	1.2 million	Narayani Sugar Mill
Corn Husk	0.8 million	Mid‑Hill Agro‑Cooperative
Wheat Straw	0.5 million	Terai Grain Board
Sisal Taro	0.3 million	Western Agro‑Initiative

Stakeholder Views and Hurdles

Consumer‑rights activist Madhav Timalsina welcomed the job‑creation angle but warned that fuel quality must never be compromised. He asked for a transparent audit trail that proves each litre meets the 99.5 percent purity standard.

Private‑sector leaders, such as Ved Prasad Kharel of Kiyan Chemical Industries, expressed willingness to invest 12 billion rupees in new distillation capacity. Yet they lament the bureaucratic maze: “seven committees, endless file‑circulation – that drags projects for years,” he said.

The Sugar Industry Association chief, Shashikant Aggarwal, noted that the implementation order arrived two decades after the first feasibility study. Without a clear pricing formula and payment schedule, investors remain hesitant.

Next Steps and Timeline

The Ministry will convene a pricing committee chaired by its secretary within the next fortnight. The committee’s recommendation will go to the cabinet for final approval. Meanwhile, Narayani Oil Corporation will draft a separate procurement regulation to govern how ethanol is purchased and blended at refineries.

Phase	Target Date	Status
Gazette Order	Mid‑February 2026	Pending
Pricing Committee Formation	End‑February 2026	In progress
First Blend Test	April 2026	Planned
Nationwide Rollout	July 2026	Projected

If the timeline holds, drivers could see the blended fuel at pumps by the second half of the year. The success will hinge on price parity, steady feedstock flow, and robust quality oversight. That changes things for Nepal’s energy security and for the farmers eyeing a new revenue stream.

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Frequently Asked Questions

Q: What percentage of ethanol will be blended with petrol? A: The government has approved a 10 percent ethanol blend for regular petrol across Nepal.

Q: When will the blended fuel be available at pumps? A: The rollout is slated for July 2026, after a test phase in April.

Q: How much petrol import will be reduced? A: Officials estimate a cut of 13 crore litres of petrol imports per year.

Q: Which raw materials will feed ethanol production? A: Molasses, corn husk, wheat straw and sisal taro are the primary feedstocks, as outlined in the supply table.

Q: Will fuel quality be affected? A: The blend must meet a 99.5 percent purity standard, with continuous laboratory monitoring to ensure engine compatibility.

Q: How will the price of the blended fuel be set? A: A pricing committee under the Ministry of Industry, Commerce and Supplies will recommend a rate, which the cabinet will then approve.