INDIA: Ethanol producers reserving 50% of supplies for petrol
Published: 08/31/2010, 6:58:50 AM
Ethanol manufacturers in Maharashtra, in a serious bid to supply ethanol for 5% blending with petrol, have decided to reserve half their alcohol stock exclusively for this, according to India's Business Standard newspaper.
This would ensure sugar mills and ethanol manufacturers do not divert the alcohol for inter-state export. The decision was taken at their meeting with Union Agriculture Minister Sharad Pawar.
Vijaysinh Mohite-Patil, president of the Ethanol Manufacturers Association, told Business Standard, "This is necessary, especially in view of past experience, wherein due to less crushing of sugarcane, ethanol prices remained stable, while prices of alcohol and molasses increased. This resulted in diversion of alcohol for exports. Keeping aside 50% for ethanol will help manufacturers meet their commitments to OMCs (oil marketing companies)."
He said ethanol manufacturers from the state had given their formal expression of interest to OMCs for the supply of 304.2 million litres for the five% blending with petrol.
Mohite-Patil said state excise minister Ganesh Naik, who was present at the meeting, had said his ministry would look into the norms on keeping a fixed alcohol stock for ethanol production.
OMCs are to procure ethanol at INR27 (US$0.57) per litre against the existing INR21.50 per litre till a committee chaired by Planning Commission member Saumitra Chaudhuri would determine the formula for deciding future pricing. Patil said 1.0445 billion litres of ethanol would have to be supplied to OMCs for the five% blending with petrol between September 1 and August 31 next year.
Pawar asked ethanol manufacturers to fully cooperate in the petrol-blending programme. He said sugar mills which do not have distillery and ethanol production units should immediately go in for such plants.
Mohite-Patil made a strong plea for uniform import and export fee on ethanol at the all-India level. "This is necessary as at present these rates are varied and it will increase ethanol price. For example, in Maharashtra, import and export fee is INR1.50 per litre. In Karnataka, import fee is INR1.50 per litre, while export fee is nil. In Gujarat, the import fee is INR5 per litre, while in Madhya Pradesh and Chhattisgarh, import fee is INR3.50 a litre," he noted.
Ethanol manufacturers also demanded the deposit fee sought by OMCs be reduced to 1% from 10% of the contract price.