- Miftah warns against making “hasty decisions without proper evaluation.”
- He says sugar mills could enter the sector quickly if ethanol proves viable.
- He expresses doubts about immediate deployment due to infrastructure issues.
ISLAMABAD: Former Finance Minister and Awaam Pakistan Party (APP) leader Miftah Ismail has urged a careful and thoroughly vetted approach to Pakistan’s ethanol blending policy to bring down oil prices.
“It’s always good to take a look and evaluate things, but you have to be careful when changing policies,” he said while speaking to The news.
Miftah warned against making “hasty” decisions without proper evaluation, adding that exploring the viability of ethanol blending is reasonable, but any policy adjustments should be carefully considered.
He noted that if ethanol production proves commercially viable, sugar mills would naturally enter the sector. “They will get one more market and hope that the price of ethanol will increase,” he added.
Discussing the possible impact on oil marketing companies, Miftah said the results will largely depend on government policy. If companies are mandated to blend a fixed percentage, such as 10% ethanol, and given a fixed price, many could purchase 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 sugar industry representatives, could quickly conduct a basic assessment. “This can be studied in 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 combining mechanisms, required infrastructure and timelines. “I don’t think it’s immediately feasible and implementable,” he said.
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 between $60 and $80, ethanol is generally not economically viable,” he explained.
Drawing comparisons, he noted that Brazil has a vast sugar cane and ethanol industry where sugar is often a byproduct, while the United States supports ethanol production through large-scale corn cultivation and political mandates.
While he acknowledged that current gasoline prices in Pakistan could make ethanol blending appear financially feasible, he cautioned that operational and logistical constraints may limit its viability in the short term.
