The Hindu Business Line : Ethanol blended petrol to be priced at Rs 21.5/litre

Industry & Economy - Petroleum
Agri-Biz & Commodities - Non-conventional Energy
States - Tamil Nadu
Ethanol blended petrol to be priced at Rs 21.5/litre

R. Balaji

Distilleries to start supply with immediate effect

Chennai , Nov. 7

The supply of ethanol-blended petrol is set to start across the State with the distilleries and oil companies agreeing on ethanol pricing.

According to sources in the know, they have agreed on a base price Rs 21.50 a litre of ethanol for a three-year period. Previously, they were paid Rs 18.75. The distilleries have been asked to supply ethanol with immediate effect.

Over the next three years, the distilleries will supply 5.8 crore litres of ethanol a year. Initially, distilleries connected to five sugar mills — Thiru Arooran Sugars, Dharani Sugars, Rajshree Sugars, Kothari Sugars and Sakthi Sugars — will supply the ethanol.

Production facilities

In March 2007, E.I.D. Parry is also expected to commence supply. From July 2007, two cooperative sugar mills in Tamil Nadu are expected to have ethanol production facilities, when they will also start supplying. Together they will meet the ethanol requirement in Tamil Nadu for the gasohol programme, sources said.

Sources in the know say that ethanol-blended petrol programme is here to stay. Earlier, it was taken up in fits and starts because of problems in ethanol availability and pricing. Also, because of limitations in the quantity of ethanol available the programme was restricted to a few districts in South Tamil Nadu.

Stable price assured

This time the contract is for a three-year period, which provides a comfort to the suppliers and buyers. Oil companies have a long-term plan and the ethanol suppliers have an assured market and a stable price. Sufficient quantity of ethanol will be available to cover the entire State under the ethanol-blended petrol, gasohol programme.

The agreement comes at an ideal time for the sugar mills when a bumper harvest of sugarcane is expected for the 2006-07 season.

Stock availability

According to industry estimates, apart from an opening stock of 1.33 crore litres of alcohol, the distilleries expect to produce about 18 crore litres, which means a total availability of about 19.33 crore litres.

Even after supplying 5.8 crore litres for ethanol and meeting the IMFL requirement of about 9.6 crore litres there would be a surplus of nearly 4 crore litres.

More Stories on : Petroleum | Non-conventional Energy | Sugar | Tamil Nadu

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page