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Govt to decide on ethanol price soon

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Dr Farooq Abdullah
Dr Farooq Abdullah

The Government may soon set the price for ethanol and mandate a higher quantum to be blended with petrol under the ethanol blending programme (EBP) to promote bio-fuels.

“We will shortly decide the pricing of ethanol and take it to the Cabinet in about a month's time,” said Dr Farooq Abdullah, Minister for New and Renewable Energy. He was speaking to reporters on the sidelines of the inaugural of the International Sugar Conference and Expo on Monday.

The Government has made it mandatory for oil marketing companies (OMCs) to blend 5 per cent ethanol with petrol as part of EBP under the National Policy on Biofuels. “We should move towards a 10 per cent blending in about a year's time,” Dr Abdullah said.

The OMCs currently pay Rs 27 per litre of ethanol to sugar millers. However, the millers are not happy with the ethanol realisations as they earn much more than selling rectified spirit, which is also produced from the same feedstock molasses. Sugar millers feel that the ethanol prices should be at Rs 35-36 a litre.

Stating that the sugar millers and farmers should get the right price, Dr Abdullah said “unless we pay the right price, farmers may switch over to other crops”.

Sugar industry officials said that for the current 2011-12 season, the millers have contracted to supply 60 crore litres of ethanol to OMCs at a price of Rs 27 per litre. Last year, the sugar millers had sold some 30 crore litre ethanol to OMCs to blend with petrol.

Meanwhile, the Agriculture Minister, Mr Sharad Pawar, expressed the hope that the ethanol pricing issue would be resolved soon. The Indian sugar industry is fully capable of meeting the demand for potable alcohol and 10 per cent ethanol blending programme, he added.

The sugar conference was organised by the International Association of Professionals in Sugar and Integrated Technologies, Society for Sugar Research and Promotion and the Sugar Technologists' Association of India.

(This article was published on November 21, 2011)
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