The Cabinet Committee on Economic Affairs (CCEA) may just have a solution to India's fuel import bill problem.  The CCEA has made it mandatory for oil marketing companies, namely Bharat Petroleum Corporation Ltd (BPCL), Hindustan Petroleum Corporation Ltd  (HPCL) and Indian Oil Corporation (IOC) to blend 5% ethanol with petrol. Since ethanol is cheaper than petrol this can help reduce our fossil fuel dependence. While the blending of fuels has been going on for the past 2 years, a clear policy directive was absent. This new directive makes blending compulsory. Ethanol gives better mileage, lowers pollution emissions and is cost effective. A litre of petrol costs around Rs 70 while ethanol costs Rs 40 a litre. Over a billion litres of ethanol will be needed for this blending program. However, India has no supply shortage since the country produced over 2.2 bn litres in FY11. It may be a drop in the ocean, but this will help India's fiscal deficit.