India to set biodiesel price

The Indian government is expected to fix the purchase price paid by oil marketing companies for biodiesel at 34 rupees (US$0.73) a liter, following an agreement by biodiesel producing companies to sell the fuel at that rate in a recent meeting between the government and industry, the Business Standard reported on its website, citing an unnamed source from the Biodiesel Association of India. “We had asked the government to link raw material prices to finished prices as it happens in other countries, where biodiesel is sold at a discount to conventional diesel since it is cheaper than crude oil,” an executive from one of the biodiesel producing companies said. Most of the biodiesel plants in India are either running at 5% capacity or lying idle. “This move will help put the plants to use,” the website quoted the source as saying. (October 12, 2009)