Ex-finance minister calls for measured ethanol policy to cut fuel costs

• Miftah warns against making “hasty decisions without proper assessment”.
• Says sugar mills could enter sector quickly if ethanol proves viable.
• Expresses doubts about immediate rollout due to infrastructure issues.
  

ISLAMABAD: Former finance minister and Awaam Pakistan Party (APP) leader Miftah Ismail has urged a careful, thoroughly researched approach to Pakistan’s ethanol blending policy to reduce oil prices.

“It’s always good to take a look and evaluate things, but one should be careful in changing policy,” he said while speaking to The News.

Miftah cautioned against making “hasty” decisions without proper assessment, adding that exploring the feasibility of ethanol blending is reasonable, but any policy adjustments should be considered carefully. 

He noted that if ethanol production proves commercially viable, sugar mills would naturally move into the sector. “They will get one more market and 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 finance 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 United 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.