Ethanol manufacturers and sugar mills yesterday welcomed the Union cabinet’s approval for five per cent blending of petrol with ethanol and said they were prepared to meet the oil marketing companies’ (OMCs’) requirement of 1,044.5 million litres (of ethanol) between September 1 and August 31 next year.

The government has said OMCs would procure ethanol at Rs 27 per litre against the existing Rs 21.50 per litre, till a committee chaired by Planning Commission member Saumitra Chaudhuri determines a formula for pricing.

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Vijaysinh Mohite-Patil, president of the All India Ethanol Manufacturers Association, told Business Standard: “We do not see any problem in meeting the proposed ethanol requirement of OMCs. We strongly feel the decision will not only help reduce petrol prices by Rs 1.25-1.50 per litre but also save foreign currency incurred on crude (oil) imports.”

He welcomed the Centre’s decision whereby OMCs would bear the transportation charges from factory to depot at the same rate the OMCs transport their products. The actual transportation would be done by the sugar factories. The OMCs would also bear the cost of import and export fees, with taxes as applicable.

Prakash Naiknavare, managing director of the Federation of Cooperative Sugar Factories in Maharashtra, said the Centre’s decision was timely, especially when sugar prices are going southwards (presently Rs 200 a quintal less than production cost).

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