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Price of ethanol fixed at Rs 27 a litre for blending

BS Reporter  |  New Delhi 

The government today gave its formal approval to the introduction of five per cent ethanol-blending in petrol, at a price of Rs27 per litre for ethanol.

The Cabinet Committee on Economic Affairs (CCEA) cleared the proposal for implementation of the ethanol programme in all states except Jammu and Kashmir, Andaman and Nicobar, Lakshadweep and northeastern states.

The oil marketing companies will procure ethanol to be blended and sold under the programme at a uniform ex-factory price of Rs 27 a litre. However, the price is of interim nature and subject to adjustment from the final price to be determined later. Sugar companies stand to gain from the move. These companies earlier got Rs21.50 per litre. Stocks of leading sugar companies reacted positively to the decision. Bajaj Hindusthan gained 4.46 per cent to close at Rs 122.95, Dhampur gained 4.36 per cent to close at Rs 61.10 at the Bombay Stock Exchange.

The government also approved the formation of a working group of officers that will be in charge of ascertaining the availability of ethanol and recommend the petrol-ethanol blend percentage in the states and Union Territories up to a limit of 10 per cent.

A committee would recommend the procedure to determine the formula for pricing of ethanol, under the chairmanship of Saumitra Chaudhuri, member, Planning Commission; with principal advisor (energy); chairman, CACP; joint secretary from the petroleum and natural gas ministry; joint secretary (sugar); a representative of the sugar industry; and a representative from the oil industry; as members, an official press release said.

Following the government approval, the oil marketing companies will now have to close all existing tenders and begin procurement of ethanol at the uniform ex-factory ad hoc price from indigenous sources.

The proposal may benefit sugarcane farmers, as a variable percentage of blending is expected to ensure that surplus ethanol available in different states is adequately absorbed in the EBP Programme at the same time.

The CCEA also approved the launch of a the Rajiv Gandhi Scheme for Empowerment of Adolescent Girls, ‘Sabla’, a new scheme aimed at enhancing the nutritional and economic status of adolescent girls in the age group of 11 to 18 years in select 200 districts of the country.

It also cleared the proposal to expand the ongoing Centrally-sponsored Scheme ‘Livestock Health and Disease Control’ by adding four new components and enlarging the scope of the existing Foot and Mouth Disease Control Programme from 54 districts to 221 districts.

A proposal for setting up a commission to check illegal mining was also approved by the Cabinet. The panel has been asked to submit its report within 18 months.

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First Published: Tue, August 17 2010. 02:39 IST