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Industrial Products India, Industrial Manufacturers & Suppliers
 




 
   
 
 
 

Ethanol may be procured locally

Ethanol may be procured locally; Moily rejects bids by global companies

The oil ministry is looking at domestic suppliers to rescue the Ethanol Blending Programme or EBP, after bids by foreign suppliers were rejected for quoting exorbitant prices leading to fears of petrol prices rising on the back of costly imported ethanol.
 
In March, state-run oil companies had floated two tenders, one global and the other domestic to procure the biofuel.
 
Against an annual requirement of 105 crore litre, the domestic sugar industry committed 55 crore litre while the rest was supposed to come through imports.
As oil companies could procure only one-third of their requirements from domestic sources, they feared petrol prices would go up due to more blending of costly imported ethanol. ET first reported the story on May 28.
"I have rejected global tenders to supply 80 crore litres of ethanol because suppliers quoted exorbitant rates and I can't allow petrol prices to go up because of 'ethanol blended petrol (EBP) programme," said oil minister Veerappa Moily.
Saying he could not be forced to take decisions against the national interest, Moily said, "We will float fresh tenders and encourage Indian sugar industry to supply ethanol at much cheaper rates compared to international suppliers."
Earlier domestic sugar mills asserted that a larger amount must be procured from them in order to balance the final cost of petrol. The sugar industry has calculated an annual saving of Rs 6 per litre annually for state run oil companies if they procure 53% of their requirements from domestic sugar mills.
So, in response to the oil minister's decision to cancel foreign ethanol tenders, domestic sugar mills are ready to supply the balance amount to the oil companies. "Domestic industry is in a comfortable position to supply balance ethanol amount from November if the oil companies float a supplementary tender," said Abinash Verma, director general, Indian Sugar Mills Association (ISMA), apex sugar industry representative body.
When the global tender was floated in March with a validity of two months, foreign companies tendered a very high price. Against the maximum delivered price of Rs 48-49 per litre of domestic ethanol at oil depots, the minimum landing price of imported ethanol is Rs 69 per litre going up to Rs 90 per litre. Both domestic and foreign tenders expired in May but domestic sugar mills had it extended till July. "The ethanol supply timeline however is for 12 months under which two sugar seasons will fall. So, sugar mills would be able to supply balance 50 crore litre when the supplementary tender is floated during the next sugar season (October 2013-Spetember 2014)," said Verma.
Last November, the Cabinet had made sale of 5% ethanol blended petrol mandatory from June 30, and allowed oil companies to negotiate the price with domestic and overseas suppliers of the bio fuel.

 
     
 
   
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