Report - 08/Dec/2014: The government is not planning to deregulate diesel, LPG and kerosene prices by withdrawing subsidy on them, R P N Singh said. KOLHAPUR: Ethanol makers are pushing the Centre for blending of the spirit with petrol so that it could become an additional source of income for factories. \"The purchase price of ethanol was fixed at Rs 27 per litre by public sector oil companies around seven years ago. The current demand is a minimum of Rs 44 per litre so that sugar factories could earn better. It would be helpful for factories as they would be able to pay a better price to sugarcane cultivators,\" said Vijaysinh Mohite Patil, chairman of Maharashtra State Federation of Cooperative Sugar Factories Ltd. Mohite Patil added, \"We will meet the new petroleum minister again and seek his intervention in the issue. It is an important decision, which should be taken up on priority basis. It will help solve the sugarcane payment issue at the local level and at the same time bring down dependency on oil imports.\"
He said he would stress on the necessity of ethanol blending with petrol for the survival of the sugar industry as well. The remains of cane after sugar production is used for power generation but the payment is made to the cultivators at the end of the quarter or financial year. In such a situation, ethanol blending is better wherein factories can earn on supply basis and immediate transfer of payment to farmers is possible, Mohite Patil pointed out. The Centre approved ethanol-blending with petrol 14 years ago. According to the Ethanol Producers\' Association, unlike petroleum products, ethanol\'s production is easier and economical. The Centre had also planned to increase ethanol blending from 5% to 20%, so that the import bill on fossil fuels would come down. However, local use of the blended fuel has not taken off as expected. \"If ethanol is blended with petrol, the fuel would cost Rs 5 less per litre. The average price of a litre of petrol is Rs 60 across the country. Ethanol manufacturers are demanding Rs 44 per litre from the government, which is significantly less than the retail price of a litre of petrol. With no decision from the Centre forthcoming, we are exporting ethanol to European Union (EU) countries,\" said an official from the association. Various meetings were held, but the new price was not fixed, he added.
\"Many ethanol suppliers have either stopped ethanol supply or diverted it to overseas markets because of better prices there,\" the official said. The current ethanol export rate is Rs 40 per litre which is supplied to countries in the European Union, but same is not used in domestic market due to lack of willingness, Mohite Patil said. Senior consultant and Ethanol India member Deepak Desai said, \"The oil firms issued tenders recently, but due to lower prices quoted, there was little response from ethanol producers. The domestic industry can grow if the government takes ethanol blending seriously.\" Total requirement of Ethanol in country: 105 crore litre Maharashtra supply: 14.77 crore litre. Price sought: Rs 44 per litre. Ethanol in Maharashtra Annual molasses production: 30 lakh tonne Potable Alcohol: 15 crore litre Industrial Alcohol: 30 crore litre Army and small industries: 1.5 crore litre Ethanol manufacturing capacity: 90 crore litre