The ongoing US-Iran-Israel war has had notable socio-political and economic consequences that are being felt the world over. One these negative externalities include supply shortages of commodities such as liquified petroleum gas, which has led to an ongoing LPG crisis in India.
NDTV Profit explores the alternatives to LPG, policy recommendations for the same and what might happen next.
Alternatives
Ethanol is an emerging alternative to LPG and is being cited by studies, governance policies and global bodies across the world as a viable source of energy.
As per industry reports, ethanol stoves can be produced and operated at relatively low costs as low as Rs 800–1,000 when mass produced. Studies have also shown thar ethanol stoves can reduce household air pollution. Organizations such as the American Society for Testing and Materials have introduced standards for ethanol cooking fuels and appliances.
Programs promoting ethanol cookstoves have been implemented in Brazil and in several African countries. The International Energy Agency projected that an additional 200 million people could rely on biomass (from which ethanol is derived) for cooking and heating by 2030.
ALSO READ: LPG Shortage: Chennai Hoteliers Body Says 'Will Have To Shut Restaurants Within 24 Hours'
Policy Recommendations
On the lines of PM Ujjwala Yojana, India can launch a dedicated program to promote ethanol as an alternative cooking fuel. The Compressed-Biogas Blending Obligation framework can be fast-tracked on the lines of the Ethanol Blending Program.
In parallel, carbon credit mechanisms and viability-gap funding can be introduced to support large-scale ethanol and CBG cooking projects.
Profitability
Higher crude prices makes ethanol production more profitable for sugar mills. Higher sugar prices also make an ethanol diversion more attractive. Global prices are back at a four-week high. Indian domestic sugar price is now on par with global prices. However, a higher ethanol mix in Brazil may tighten global sugar supply in the short term.
ALSO READ: LPG Scare: Induction Stoves Sold Out On Blinkit, Swiggy; Flipkart, Amazon See Sharp Surge In Sales
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
