State governments are being urged to rationalise the tax structure on biofuels to promote its usage in blending with diesel, Minister of State (Independent Charge) for Petroleum and Natural Gas Dharmendra Pradhan said on Monday.
"States have a varied tax regime for bio-fuels. We are in talks with states to set up a single tax structure for biofuels and if not then at least a fixed bandwidth of taxes for biofuels," Pradhan said here.
The Minister was speaking at an event to launch retail sale of high speed diesel blended with bio-diesel in selected retail outlets of HPCL, BPCL and IndianOil.
While the sales are initially limited, the Minister said with greater availability, promotion of bio-diesel blended fuel will be promoted.
"For five per cent blending, we require 3.5 million tonne a year of bio-diesel. Our current capacity is 1 million tonne. As we increase capacity to make more bio-diesel we will increase the number of retail outlets where bio-diesel blend is available," said Pradhan.