"In the upcoming Parliament session, I am announcing a policy of blending 15 per cent methanol in petrol," Gadkari said at an event.
He said methanol gets made from coal and costs only Rs 22 per litre as against the prevailing price of about Rs 80 per litre for petrol and added that China is making the coal byproduct for Rs 17 per litre itself.
"The costs will go down, pollution will go down," the Union minister said.
He said factories in and around Mumbai, including Deepak Fertilisers and Rashtriya Chemicals and Fertilisers (RCF), can generate methanol.
Gadkari said Swedish auto major Volvo has got a special engine to the financial capital which runs on methanol and using the locally available methanol, he will be attempting to run 25 buses entirely on the fuel.
The Union minister said ethanol should also be used more widely and said that he has suggested his cabinet colleague in-charge of the petroleum ministry to look at this rather than building petrol refineries that cost over Rs 70,000 crore.
Gadkari said the total investment opportunity on ethanol alone if Rs 1.50 lakh crore. He reiterated his concerns on the traffic growth because of a 22 per cent rise in car sales annually and expressed a desire to focus less on roads because of this.
On the road works, he said the government has reached 28 per day and plans to accelerate this further to 40 kms soon.
In FY18, it will increase the total number of road projects awarding to 20,000 km from the year ago's 16,000 km, he said, adding that Rs 7 lakh crore worth projects have been awarded by his ministry since he took charge in 2014.
Gadkari expressed concern over the speed of projects under the Defence Ministry-led Borders Roads Organisation and added that his ministry has started the the National Highways and Infrastructure Development Corporation for the same.
The newly formed company will be undertaking works worth Rs 1.5 lakh crore in strategically important locations like north east India, he said. The government is targeting to increase the the total amount of works awarded by the NHIDCL to 3,000 km in FY18, up from 800 km in FY17, he said.