In a move that will benefit the domestic suppliers, the Petroleum and Natural Gas Ministry has decided against ethanol imports, given the high prices.

To the tenders called by the oil marketing companies (OMCs) for implementing the mandatory five per cent ethanol blending programme with petrol, the global suppliers had quoted prices, which were almost twice of that offered by domestic players. While the global players offered a price ranging from Rs 72 to Rs 90 per litre, domestic players offered Rs 38 to Rs 45 per litre.

Oil Minister M. Veerappa Moily, told Business Line that “I will not go for imports till the price is this high. We have to get prices closer to the domestic prices…anyway, we are finding it difficult to fund our under-recoveries. There is no question of opening another door for funding subsidies.”

To meet the ethanol requirements, the OMCs may come out with new tenders.

“In the indigenous tender, bids for 55 crore litres were received. Of this, orders for approximately 21 crore litres have been placed. We are prepared to place rest of the orders before June 30 (deadline to meet five per cent blending target),” Moily said.

The domestic supply of ethanol from the orders placed so far, from July per month will be about 2 crore litres. Till date, only 0.2 crore litre has been received. While the global tenders have been abandoned for now, the validity of the tenders for domestic suppliers, which ended on May 27 have been extended by two months.

As the trend goes, the OMCs have to rely only on the domestic sugar companies to source the required ethanol for blending – estimated at 105 crore litres for the year-ahead.

Last November, the Government had decided that five per cent mandatory ethanol blending with petrol should be implemented. The target to achieve this was by June 30.

>richa.mishra@thehindu.co.in

>siddhartha.s@thehindu.co

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