Pawar seeks PM's intervention to finalise ethanol price

Sharad Pawar has sought Prime Minister Manmohan Singh's intervention to decide the final price of ethanol for blending in petrol to ensure smooth supply of the product during the 2011-12 season.

In August last year, the government had fixed an interim price of Rs 27 a litre for ethanol under the Ethanol Blending Programme (EBP) for mandatory blending of 5% ethanol with petrol. An expert committee, headed by Planning Commission Member Saumitra Chaudhuri, was also set up to recommend a formula for ethanol pricing.

"I will strongly advocate that we must now crystallise our EBP programme by deciding the final price of procurement on ethanol and inviting tenders for the supply of ethanol during the 2011-12 sugar season. I would sincerely request for your kind intervention in this matter," Pawar said in a letter to the Prime Minister.

The expert panel sumitted its report in April, 2011, "but no further action has been initiated," he noted.

Due to delays in announcing the final rate for ethanol and the difficulties in selling the available molasses in the domestic market, over six lakh tonnes of molasses had to be exported in the past six months at minimal prices, he noted.

Ethanol is made from molasses. "I am given to understand that these exported molasses are used basically for cattle feed. Six lakh tonnes of molasses would have given 15 crore litres of fuel ethanol, sufficient to substitute almost one% of the country's petrol consumption. This is wastage of precious resources," Pawar pointed out.

This also proves that the ethanol industry has the capacity to satisfy the demands of all sectors and the EBP, he added.

Pawar further said, "There is lot of enthusiasm amongst the ethanol manufacturers as well as the cane farmers toward the EBP" in view of the Cabinet's approval of the National Policy on Biofuel, which lays down a target of 20% ethanol blending with petrol by 2017.

As much as 59 crore litres of ethanol contracted at the interim price is being supplied by the ethanol-makers to the oil marketing companies quite smoothly across most parts the country, he said.

source: BS