The sugar industry in Maharashtra on Saturday welcomed the Union government''s decision to permit use of old stock of wheat and rice for ethanol production that can be blended with petrol and diesel.

This was a long pending demand of Maharashtra''s sugar industry and would help reduce crude oil imports, BB Thombare, chairman of West Indian Sugar Mill Association told PTI.

"Though most old stock generation is from Punjab, Haryana and Uttar Pradesh, the ethanol producing sugar mills from Maharashtra are eying it to maintain its uninterrupted production throughout the year. Arid regions like Marathwada, which have a number of sugar mills, face a drop in sugarcane production every three to four years," he said.

The Centre has already allowed sugar mills to produce ethanol directly from sugarcane juice, unlike earlier when there was a restriction on using molasses as base, he said.

"This additional permission of using old stock of food grain for ethanol will strengthen the industry and production will jump further. The more ethanol is produced, the more it can be blended with petrol and diesel. Eventually dependency on imports will reduce," said a senior official from the state sugar commissionerate in Pune.

"For instance, the Centre had sought supply of 350-400 crore litres of ethanol last year but tenders of only 120 crore were submitted. The Centre then permitted mills to use cane juice for ethanol production. It has now allowed use of old food stock as well," Thombare, whose mill is in Osmanabad, said.

"This year, in response to the Centre’s requirement of 350 crore litres of ethanol, tenders for 322 crore litres have already been submitted. Even if there is shortage of sugarcane supply, old stock of rice and wheat can be used to produce ethanol. It will balance sugar production and ethanol supply," he claimed.