The Government has asked oil companies to sell petrol mixed with 5 per cent of ethanol and warned of imposing heavy penalties on those not adhering to this directive.

"The Cabinet has taken a firm decision and made compulsory for oil companies to blend 5 per cent ethanol in petrol. It has also decided to impose heavy penalties, if oil companies fail to sell petrol without 5 per cent of ethanol," Union Minister for New and Renewable Energy Farooq Abdullah said.

In November 2006, the Centre had mandated that ethanol should be blended in a 5 per cent proportion with petrol to be sold throughout India, except in areas like the North-East and Jammu and Kashmir.

The government stipulated that the amount of ethanol in petrol may be optionally ramped up to 10 per cent from October 2007 and made compulsory with effect from October 2008. But oil companies failed to implement the same.

The Petroleum Ministry has been instructed to ensure all oil marketing companies (OMCs) implement the decision, Abdullah said.

Earlier, inaugurating `India Energy 2009' he said India is passing through a critical phase of development that is greatly dependent on availability of energy. Our dependence on imported fossil fuels is a matter of common concern.