The Hindu Business Line : Oil companies to expand gasohol supply across TN

Advantage mills
Increasing ethanol supplies offers multiple benefits
To supply to entire State, an additional 4 crore litres would be needed

Chennai , May 10

Oil companies are set to expand marketing of ethanol-doped petrol, gasohol, across Tamil Nadu and are exploring opportunities for sourcing ethanol here for supply to Kerala, according to oil company sources.

The proposed expansion is in line with the Petroleum Ministry's decision setting them a July deadline to expand gasohol supplies, they say.

The move is a significant development for the sugar mills in Tamil Nadu, which produce ethanol at their distilleries.

Increasing ethanol supplies against the backdrop of a glut in sugarcane production offers multiple benefits: revenue from the new market apart, the assured market and price for ethanol helps to buoy up prices of alcohol supplied to liquor manufacturers and chemical industries, and helps to dispose of the large quantities of molasses generated during the season.

For now, five sugar mills with distilleries are supplying 1.85 crore litres of anhydrous ethanol to the three oil companies. For the oil companies to supply gasohol to the entire State, an additional 4 crore litres ethanol would be needed.

Oil companies are in discussions to see how the scope of the contract can be expanded or if a new tender would have to be floated. The idea is to expedite the process to meet the deadline, they said.

The distilleries run by the sugar mills — Thiru Arooran Sugars, Dharani Sugars, Rajshree Sugars, Kothari Sugars and Sakthi Sugars — are now supplying ethanol at a base prices of Rs 18.75 a litre. Indian Oil Corporation, Hindustan Petroleum and Bharat Petroleum supply gasohol in Tirunelveli, Kanyakumari, Tuticorin, Ramanathapuram, Virudhunagar, Dindigul, Coimbatore, Erode and the Niligiris.

Mills comfortably set

According to sugar mill sources, the mills are comfortably set to supply the required quantity of ethanol for Tamil Nadu and Kerala markets. At a recent meeting with officials they have pointed out that with sugarcane production at about 200 lakh tonnes, over 9 lakh tonnes of molasses would be generated which translates to 21 crore litres ethanol.

With the estimated 10 crore litres for potable alcohol, 3.5 crore litres for the chemical industry requirements and 5 crore for gasohol there is enough to spare for the Kerala market.

Oil company officials say that with gasohol supplies stabilising in the existing markets in Maharashtra, Uttar Pradesh, Punjab and Haryana, they are looking at expanding to the East.