India is looking at alternative fuel sources to reduce its dependence on oil.

The global oil market is volatile and recent tensions between the US and Iraq have seen the oil price at a 19-month high of more than $30 a barrel.

As India imports 70% of the oil it uses, the country has been hit hard by the increased cost and uncertainty and so is investigating other energy sources.

A bio-diesel extracted from trees is one such alternative under consideration.

The bio-diesel would be cheap to produce as it can be extracted from certain species of tree that are common in many parts of India, such as the Jetropha, Karanja and Mahua.

The way ahead?

MK Patil, junior minister for rural development, told the Press Trust of India the government is already preparing a case for the launch of the new fuel.

"Research on bio-diesel as an efficient, clean and 100% natural energy alternative to petroleum fuels have been successful," he said.

Mr Patil said the bio-diesel is already in use in Italy, the US, Japan and Malaysia and that it would cost India 200bn rupees (�2.7bn; $4.1bn) to set up its own refining plants.

Research has also shown ethanol extracted from sugar cane can be blended with diesel to produce a successful fuel, Mr Patil added.

Consumers in India have already seen fuel prices rise as the government abolished state price controls on its $15bn oil and refining industry in March.

State subsidies were lifted on all petroleum products, except some household necessities such as kerosene and cooking gas.