Sugar millers seek early decision on ethanol blending

Sugar millers have expressed disappointment over the delay in issuing the final gazette notification implementing a recent cabinet decision on mandatory 5 per cent ethanol blending across the country.

The Indian Sugar Mills Association (ISMA) has said that delay in issuing the notification despite a cabinet decision regarding the same in November has crimped Oil Marketing Companies (OMCs) freedom to float tenders as per the decision of the cabinet.

The union cabinet in its decision on November 22 had said that the mandatory 5 per cent ethanol blending with petrol should be implemented across the country and the price at which OMCs purchase ethanol from suppliers (mainly sugar companies) should be determined by both.

It also said that in case there is shortfall in ethanol in any given year, OMCs and chemical companies will be free to import ethanol to supplement their demand.

Sugar mills, who are the major suppliers of ethanol said that OMCs would need to procure around 88 crore litres of ethanol to implement the programme from January 1, 2012.

“10 months have already been wasted and in the absence of a gazette notification, manufacturers and suppliers of ethanol are selling alternate products made out of molasses or exporting the molasses or alcohol out of the country,” the millers said, adding that it could adversely impact the availability of ethanol for the mandatory 5 per cent blending.

The mills feel that by the time OMCs complete their formalities and float tender for procurement of ethanol, supplies could shrink limiting the ability of suppliers to meet the demand.“The government should therefore, issue the notification without any further loss,” ISMA said. The 5 per cent mandatory blending of ethanol with petrol has been hanging fire for a long time because of dispute between the suppliers and OMCs over the price at which ethanol should be purchased.

The government had even appointed a high-powered committee under the chairmanship of PMEAC member Saumitra Chaudhuri to break the imbroglio and get the programme started.The cabinet finally decided to leave the price as per the demand and supply in the market.