India, July 26 -- Having achieved its 20% ethanol blending targets five years prior to its deadline, it's safe to say that biofuel is to play a key role in the central government's plan to reduce crude oil dependence. It's a win-win for both the government and the agricultural sector, which can now utilise excess sugar for ethanol production.

With the exception of Delhi, petrol prices range between Rs.100 - Rs.104.2 per litre. Earlier this year, the per-litre price of ethanol increased by Rs.1.69, bringing the total ex-mill cost of ethanol produced for the purposes of blending with petrol to Rs.57.97. Given that ethanol is a little over half the price of petrol, the 20% blend, which was achieved earlier this year, should theoretically be...