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R. Balaji

Bharat Petroleum has given `letters of intent' in Tamil Nadu, accepting the price of Rs 18.75 a litre of anhydrous ethanol quoted by the sugar mills.

Chennai , Nov. 20

THE supply of ethanol-doped petrol is expected to start in Tamil Nadu in December with oil companies giving in-principle approval to sugar mills' ethanol price.

But the programme is in limbo in Andhra Pradesh where the mills and oil companies are yet to agree on a price.

According to industry sources, Bharat Petroleum has given `letters of intent' in Tamil Nadu, accepting the price of Rs 18.75 a litre of anhydrous ethanol quoted by the sugar mills. Others are expected to follow suit soon.

The mills are expected to start supplies in the first week of December.

Restricted supplies: But the programme is likely to be restricted to the southern districts in Tamil Nadu as the sugar mills are yet to get the State Government's approval to supply enough ethanol to meet the requirements of the entire State.

The sugar mills that have contracted to supply anhydrous ethanol under this programme will supply a total of 1.85 crore litres to three depots in Tuticorin, Irugur and Tirunelveli.

From here, the oil companies will be able to supply to the southern districts.

The South Indian Sugar Mills Association, representing sugar mills, has discussed the issue with the State Government, which is believed to be considering permitting an additional allocation of anhydrous ethanol under the programme.

To supply the entire State with 5 per cent ethanol-doped petrol, the mills will have to supply oil companies with more than 4 crore litres.

The oil companies too have asked the mills if they would be in a position to commence supply.

The sugar mills can handle the requirement, as they have a capacity to produce about 5 crore litres, the sources said. Also, the production this year will be more than adequate to meet the requirements of other sectors.

In Andhra Pradesh, sugar mills and oil companies are yet to agree on the price, said the sources.

While in Tamil Nadu, the price of rectified spirit is Rs 18 a litre, in Andhra Pradesh, it is still about Rs 23-24. Therefore, it is not viable to supply anhydrous ethanol at Rs 18.75.

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