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ISMA signs pact with oil cos for ethanol supply

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SWEET PACT: Dr N.G. Kannan, IOC Director, Marketing, exchanging documents with Ms Rajshree Pathy, President, Indian Sugar Mills Association, after signing a memorandum of understanding in the presence of the Union Minister of Petroleum and Natural Gas, Mr Mani Shankar Aiyar, in the Capital on Thursday. V.Sudershan
SWEET PACT: Dr N.G. Kannan, IOC Director, Marketing, exchanging documents with Ms Rajshree Pathy, President, Indian Sugar Mills Association, after signing a memorandum of understanding in the presence of the Union Minister of Petroleum and Natural Gas, Mr Mani Shankar Aiyar, in the Capital on Thursday. V.Sudershan

Our Bureau

New Delhi, Aug 4

THE Indian Oil Corporation Ltd (IOC), on behalf of all State-owned oil marketing companies (OMCs), on Thursday signed an agreement with the Indian Sugar Mills Association (ISMA) for sustained offtake of ethanol for blending it with petrol.

"Under the MoU, we have agreed to buy 4,34,000 kilolitres (kl) of ethanol from ISMA at a rate of Rs 19 a litre. Of the total quantity, initially 74,000 kl is being contracted for Uttar Pradesh," Mr N.G. Kannan, Director Marketing of IOC, said. Tenders are to be invited for ethanol supplies in Haryana and Punjab shortly.

Speaking at the signing ceremony, the Union Petroleum Minister, Mr Mani Shankar Aiyar, said the assurance of supplies at competitive rates would ensure sustainability of the programme. With this, the Petroleum Ministry was hopeful of rolling out petrol-blended with five per cent ethanol, which is a green fuel used in several countries such as Brazil, Australia and the US.

India had introduced blended petrol using ethanol derived from sugarcane three years back. But due to erratic supplies and issues of pricing, the OMCs had gradually petered off the scheme of introducing ethanol-blended petrol across the country in phases.

Initially, under the programme supplying ethanol blended petrol is being revived in the nine sugarcane-producing states and four union territories including Maharashtra, Uttar Pradesh, Tamil Nadu, Andhra Pradesh, Gujarat, Goa, Uttranchal, Haryana and Punjab.

Under the new agreement ISMA members would have to commit a fixed amount of ethanol for blending with petrol.

(This article was published in the Business Line print edition dated August 5, 2005)
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