The Hindu Business Line : Oil cos finalise ethanol price in UP

The Indian Oil Corporation (IOC) has finalised a deal to source ethanol from sugar mills in Uttar Pradesh at Rs 21.50 per litre ex-distillery. With this, the stage has been set for rollout of the gasohol programme — involving sale of 5 per cent ethanol-doped petrol — in the State within the next few days.

The public sector oil marketing companies had, on Monday, kick-started final price negotiations with sugar mills, following the opening of technical and financial bids in all States for tenders floated to purchase an aggregate quantity of 54 crore litres.

"The UP price has been finalised. Negotiations are concurrently on with mills in other States," oil industry sources told Business Line. While IOC is looking after ethanol sourcing in the northern and eastern regions, Hindustan Petroleum Corporation Ltd (HPCL) is undertaking the same for the western and Bharat Petroleum Corporation Ltd (BPCL) for the southern States.

The Rs 21.50 a litre base price for UP has been arrived on the basis of the lowest bid quoted by Bajaj Hindusthan Ltd (BHL). All other mills — there were around 31 bidders in UP — quoted Rs 22 a litre. "The rate quoted by BHL would be a benchmark, more so when they have also offered to supply the maximum quantity of 10 crore litres. We would ideally like this rate to be applicable throughout the country, though we may have to eventually settle for a band of Rs 21.50-23 per litre," the sources added.

Mills had quoted different rates in various States, ranging from Rs 21.50-22 in UP to Rs 21.50-22.50 for Bihar, Jharkhand and West Bengal, Rs 21.50-23 in Karnataka, Rs 23 in Tamil Nadu, Rs 22.50-23.25 in Gujarat, Rs 24.20 in Maharashtra and Rs 25 in Andhra Pradesh. There were, in all, eight bidders for Bihar and Jharkhand, 13 in Punjab, 28 for Delhi and Haryana, 17 for Rajasthan, six for Orissa, four for West Bengal and 42 for Maharashtra.

The sources said the Rs 21.50-23 per litre ex-distillery price for ethanol would more or less correspond to the current landed price of Rs 24-27 per litre for petrol at the depots, after accounting for transport and local levies.