Deora suggests incentives for alternative fuels in next budget

New Delhi, Feb 11 (UNI) Petroleum Minister Murli Deora has urged the Finance Ministry to give some incentives to the alternative energy sector in the coming Union Budget.

Highlighting the prospect of alternative fuels, Mr Deora said in the next budget some incentives should be given to the energy players rather than imposing tax on it.

''To help the alternative fuel sector flourish, some relaxations in form of incectives must be provided in the budget 2007-08,'' he told UNI on the sidelines of an event here last week.

Mr Deora added that ''We will provide all sorts of help to the alternative energy sector.'' However, the minister urged the state governments not to levy taxes on alternative fuel sources.

He added that some of the states have agreed to this, while the rest are being persuaded.

Currently, there are 60 million hectares of wasteland in the country that could be used for jatropha cultivation for achieving the target of five per cent blending.

India plans to replace around five per cent of its current 40 million tonnes of annual diesel consumption with jatropha biodiesel within five years.

Mr Deora said wasteland could be used effectively for jatropha plantation.

He said development of biodiesel as an alternative and renewable source of energy for the transportation sector has become critical in the national effort toward maximum self-reliance in energy.

The country imports 70 per cent of its crude oil requirements.

Last year, India consumed around 40 metric million tonnes of high speed diesel.

Jatropha, one of the raw materials used for production of biodiesel, starts bearing fruits in the second or third year of its plantation and produces harvestable yield of about 1.5 to 2.5 kg per tree.

At present, the country requires more than 100 million tonnes of oil, which is expected to reach between 350 to 500 million tonnes in the next 25 years.

UNI