- Miftah warns against making “hasty decisions without proper assessment.”
- He said sugar mills could enter the sector quickly if ethanol proves viable.
- Expresses doubts about immediate deployment due to infrastructure issues.
ISLAMABAD: Former finance minister and Awaam Party Pakistan (APP) leader Miftah Ismail has advocated a careful and thorough approach to Pakistan’s ethanol blending policy to reduce oil prices.
“It’s always good to take a look and evaluate things, but you have to be careful when changing policies,” he said, speaking to News.
Miftah warned against making “hasty” decisions without proper assessment, adding that it is reasonable to explore the feasibility of ethanol blending, but any policy adjustments must be carefully considered.
He noted that if ethanol production was found to be commercially viable, sugar mills would naturally move into the sector. “They will get an additional market and hope that the price of ethanol will increase,” he added.
Discussing the possible impact on oil marketing companies, Miftah said the results would largely depend on government policy. If companies were required to blend a fixed percentage, such as 10% of ethanol, and at a fixed price, many of them could source ethanol at lower rates and keep the margin as profit.
The former finance minister suggested that the petroleum ministry, in collaboration with Pakistan State Oil and representatives of the sugar industry, could quickly carry out a baseline assessment. “This can be studied in a few days, after which options can be worked out,” he said.
He, however, expressed reservations about immediate implementation, citing practical challenges such as mixing mechanisms, required infrastructure and timelines. “I don’t think it’s immediately feasible and applicable,” 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 the normal price of oil, between $60 and $80, ethanol is generally not economically viable,” he explained.
Drawing comparisons, he pointed out that Brazil has a large sugarcane and ethanol industry, of which sugar is often a byproduct, while the United States supports ethanol production through large-scale corn farming and political mandates.
While acknowledging that current gasoline prices in Pakistan could make ethanol blending financially feasible, he cautioned that operational and logistical constraints could limit its feasibility in the short term.
