The government is prepared to pay a higher offtake price to producers of biofuel than it does for fossil fuels in a bid to boost the use of clean energy, Petroleum Minister Dharmendra Pradhan said on Wednesday.
Addressing the Delhi Energy Dialogue conclave here organised by Ashden India, he also said that the government is prepared to loan entrepreneurs up to Rs 1 crore for setting up biofuel plants.
Noting that state-run Indian Oil Corp has agreed to give offtake guarantees to bio-gas producers, Pradhan said: "For bio-fuels, the offtake amount works out to a little more than for the traditional one which factors in the price of crude oil, refining...but we are ready to give this extra amount to promote renewable energy."
Pradhan announced last week that the government will soon bring out a National Biofuels Policy for a sector poised to become an economy worth Rs 1 lakh crore.
The policy would detail the architecture for India to make the move towards adopting second generation, or advanced, biofuels, from the current first generation ones being used, which are essentially sugar-based.
He also said that state-run oil marketing companies (OMCs) are preparing to set up 12 advanced biofuel refineries in various states over the coming years.
Speaking earlier on Wednesday at the curtain raiser of the upcoming 16th International Energy Forum (IEF) event, Pradhan renewed India's call for "responsible" crude oil prices, expressing confidence in the IEF's ability to create a roadmap for a new pricing mechanism.
"We all are concerned about responsible price mechanism. We do not expect low oil prices and understand the various difficulties of low prices in the long haul - decrease in exploration and production activities, low capital expenditure environment," he said.
"However, we also have to take care of the interest of the consumers especially in an aspiring country like India. We need a balance. We have to have affordable energy price," he added.
The 16th ministerial meeting of the IEF is being held in India after 22 years.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)