Pawar seeks PM's intervention to finalise ethanol pricing

To ensure a firm price for ethanol, Agriculture Minister Sharad Pawar has written a letter to Prime Minister Manmohan Singh, seeking his intervention to ensure its smooth supply during the 2011-12 sugarcane season that starts from October.

In August, the government had fixed an interim price of Rs 27 a litre under the Ethanol Blending Programme (EBP) for a mandatory blending of five per cent ethanol with petrol. An expert committee, headed by Planning Commission member Saumitra Chaudhuri, was also set up to recommend a formula for ethanol pricing.

“I will strongly advocate that we now must crystallise our EBP programme by deciding the final price of procurement on ethanol and inviting tenders for its supply during the 2011-12 sugar season. I would sincerely request for your kind intervention in this matter,” Pawar wrote in his letter to the prime minister.

The expert panel submitted its report in April, “but no further action has been initiated”, he noted.

Due to delays in announcing the final rate for ethanol and difficulties in selling available molasses in the domestic market, over six lakh tonnes of molasses had to be exported in the past six months at minimal prices, he said.

According to Pawar, there is lot of enthusiasm among ethanol manufacturers and cane farmers toward the EBP in view of the Cabinet’s approval of the National Policy on Biofuel, which lays down a target of 20 per cent ethanol blending with petrol by 2017.

As much as 590 million litres of ethanol, contracted at the interim price, were being supplied to oil marketing companies quite smoothly, he said.