Ethanol manufacturers have welcomed the Centre’s decision on the 5% mandatory ethanol blending with petrol but with riders. They have demanded a payment of Rs 40 per litre considering current rate of alcohol of Rs 37 per litre and Rs 5,500 to Rs 6,000 per tonnes of molasses. Besides, ethanol manufacturers want consistency in the procurement from the oil marketing companies (OMCs).
Ethanol Manufacturers Association of India, a representative body of ethanol producers across the state, has already conveyed to OMCs that they would be able to supply 101.66 crore litre by end of October next year.
Vijaysinh Mohite-Patil, president of the association told Business Standard: “The all India ethanol production capacity is 162 crore litre of which Maharashtra has maximum with 92.80 crore litre. As per the government's decision at the all-India level total requirement of ethanol up to next October would be 101.66 crore litre. This is a doable. However, we want OMCs to pay Rs 40 per litre. We have been repeatedly pursuing rise in the ethanol procurement price with OMCs.” He informed that during 2011-12, ethanol producers had incurred a per litre loss of Rs 5 as the production cost had increased to Rs 32 per litre against the procurement price of Rs 27 per litre.
Mohite-Patil said there has been a stiff rise in the prices of alcohol and molasses in Maharashtra in particular especially due to the fall in sugarcane production following drought conditions. “It won’t be possible for ethanol producers not only in Maharashtra but other states in such circumstances to supply ethanol at Rs 27 per litre especially when the ethanol production cost has surged to Rs 36.50 to Rs 37 per litre. Therefore, there is a need for OMCs to pay Rs 40 per litre,” he added.
Mohite-Patil recalled about 35 ethanol producers had shown their intention to supply 4.82 crore litre during 2012-13 at Rs 37 per litre. OMCs had forwarded its letter recommending ethanol producers’ demand to the Cabinet Committee on Economic Affairs.
An OMC official, who did not want to be named, admitted that all OMCs would joint review the Centre’s 5% ethanol blending programme and decide future course of action. “The government’s decision is in the right direction. There were hiccups in the past but the programme will be implemented as several issues have been addressed. OMCs will jointly review the Centre’s decision and issue the tender if required. The price will be quoted in the tender,” the official informed.