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| Oil firms to pay Rs 27 per litre for ethanol |
| Press Trust of India / New Delhi Jul 27, 2010, 18:34 IST |
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Oil companies will pay an interim price of Rs 27 per litre for ethanol, which they will buy from the sugar mills for doping in petrol, and a final price will be fixed after an expert committee submits its report.
"This is an interim price that the EGoM has approved. The final price will be dependent on the recommendations of an expert committee appointed for the purpose," Oil Secretary S Sunderashan said here today, when asked about the outcome of of an Empowered Group of Ministers (EGoM) meet last evening.
The EGoM had fixed the price at Rs 27 for a litre of ethanol in April this year as well.
In October 2007, the Cabinet had made mandatory 5 per cent ethanol blending across the country, with the exception of Jammu & Kashmir, North-East and island territories. However, the Petroleum Ministry had not been able to implement the decision due to non-availability of the product.
In March this year, the government had constituted the EGoM to resolve differences over mixing of ethanol in petrol. The Chemical Ministry was objecting to the use of ethanol for petrol-blending, stating that the price of molasses they use for manufacturing liquor has gone up.
Both ethanol and alcohol are made from molasses, and the sugar industry had estimated a production of 160 crore litres in 2009-10.
Potable liquor sector needs about 100 crore litres while the 5 per cent ethanol-blending programme would require 68 crore litres. Besides, molasses are also required for industrial purposes.
The price increase was supposed to tempt producers to sell ethanol to oil firms, but the Chemical and Fetiliser Ministry had protested by saying that the petrol-doping programme will impinge upon the demand of potable liquor sector and chemical makers.
The potable liquor sector and chemical producers are two primary consumers of molasses-based alcohol. It was stated that the demand for the potable sector was increasing, and there was no justification to increase the price of ethanol to Rs 27 per litre.
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