Indian sugar mills association

Ethanol supplies set to increase

Date:	24 Dec 2017

Source:	The Hindu

Reporter:	M. Soundariya Preetha

News ID:	27802

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Ethanol supplies by sugar mills and by ethanol producers finalised for the supply period 2017-2018 [December to November] will be 140 crore litres. This is 26% higher than the supply of 111 crore litres in 2015-2016. Ethanol supplies finalised last year were 66.5 crore litres.

The Indian Sugar Mills’ Association said following two rounds of negotiations between sugar mills and ethanol manufacturers on the one side, and oil marketing companies (OMCs) on the other, against the first tender invited in November, 140 crore litres of ethanol supplies had been finalised.

With this, the country would see blending of up to 4.5% ethanol blending with petrol in 2017-2018. Some more quantities could be supplied by sugar factories/ethanol manufacturers when the next round of tender is opened, possibly in February 2018, sources said. The government had earlier made it mandatory for oil marketing firms to ensure that ethanol would make up 10% of the petrol they sold at the retail level.

However, that mandate is yet to see light of day, according to sources, due to inadequate supply of ethanol. OMCs would need 313 crore litres to meet the 10% blending target.

Ethanol supplies also go to sectors such as alcohol and chemicals. If ethanol supplies increase, it would help reduce the oil import bill for the country.

‘Remove levies’

States such as U.P. can meet the targeted 10% ethanol blending because of high sugar production. For other States to meet the mandate, governments should remove all levies on denatured ethanol, the association said. While Uttar Pradesh will supply 55 crore litres of ethanol compared with 41 litres last year, Maharashtra will supply 50 crore litres.

OMCs have offered an ex-distillery rate of ₹40.85 for a litre of ethanol. Sugar mills and ethanol manufacturers will get almost ₹5,700 crore this year from ethanol sales. Uttar Pradesh supplied 41 crore litres last year. In Maharashtra, with a drought hampering production the last two years, there was lower cane and molasses availability and only 7.5 crore litres were supplied in 2016-2017.

The association has appealed to State Governments to remove the taxes and duties on denatured ethanol to facilitate smooth movement and supply of ethanol.

Till December 15, 469 sugar mills in the country were crushing sugarcane for 2017-2018 sugar season (October to September) and have produced 69.40 lakh tonnes of sugar this season. This is almost 30% higher production compared to the same period last season. The mills in Maharashtra have so far produced 25.50 lakh tonnes during the current sugar season and those in Uttar Pradesh have produced about 23.37 lakh tonnes.

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