Former finance minister Miftah Ismail has proposed ethanol blending as a potential solution to significantly lower petrol prices in Pakistan, while advising the government to proceed carefully.

Speaking on the idea, he said there is merit in evaluating ethanol-mixed fuel but cautioned against rushing into policy decisions without thorough groundwork. He noted that if ethanol production proves commercially viable, sugar mills could expand into the sector to tap an additional revenue stream.

Miftah added that the impact on oil marketing companies would largely depend on government policy, particularly if authorities introduce a fixed blending ratio and pricing structure. Under such a framework, companies could benefit by sourcing ethanol at lower costs while maintaining their margins.

He suggested that the Ministry of Petroleum, in collaboration with Pakistan State Oil and the sugar industry, should carry out a preliminary assessment to examine the proposal. However, he expressed doubts about immediate implementation, citing infrastructure and logistical challenges.

Referring to global trends, Miftah said ethanol blending typically becomes economically viable when crude oil prices exceed $100 per barrel, while at more common levels of $60 to $80, its attractiveness diminishes.

He also pointed to countries like Brazil and the United States, where strong agricultural capacity and supportive policies have enabled widespread ethanol use, noting that Pakistan may struggle to replicate such models in the short term.