Maharashtra ethanol makers to keep 50% alcohol for petrol blending

Demand that the deposit fee sought by OMCs be cut to 1% from 10%.

Ethanol manufacturers in Maharahstra, in a serious bid to supply ethanol for five per cent blending with petrol, have decided to reserve half their alcohol stock exclusively for this. 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 here.

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 per cent 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 per cent 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 Rs 27 per litre against the existing Rs 21.50 per litre till a committee chaired by Planning Commission member Saumitra Chaudhuri would determine the formula for deciding future pricing. Patil said 1,044.5 million litres of ethanol would have to be supplied to OMCs for the five per cent 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 Rs 1.50 per litre. In Karnataka, import fee is Rs 1.50 per litre, while export fee is nil. In Gujarat, the import fee is Rs 5 per litre, while in Madhya Pradesh and Chhattisgarh, import fee is Rs 3.50 a litre,” he noted.

Ethanol manufacturers also demanded the deposit fee sought by OMCs be reduced to one per cent from 10 per cent of the contract price.