Indian sugar mills offer 1bn litres of ethanol for fuel blending

03 September 2010 09:20  [Source: ICIS news]

MUMBAI (ICIS)--Sugar mills in India have offered 1bn litres of ethanol to oil marketing companies for blending in petrol amid higher availability of the material, a government source said on Friday.

“The monsoon season this year is good and sugarcane output will be higher and lead to more ethanol availability,” the source said.

Indian refiners require around 860m litres/year to achieve the mandatory 5% blending requirement, Apurva Chandra, joint secretary at the oil ministry was quoted by local media as saying.

The source added that ethanol-blended petrol may be available by the first week of October.

The move comes after the government raised ethanol prices from Rs20-21 ($0.43-0.45/litre) to Indian rupees (Rs) 27/litre.

The earlier price was deemed to be low by most sugar mills, which were now willing to offer at the revised rates, said the source.

Oil marketing companies such as Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) were expected to award the ethanol supply contracts on 6 September, the source added.

The Indian government had made the sale of ethanol-blended petrol mandatory in 2007, but could not implement the programme until recently due to a shortage of ethanol and opposition from the chemical industry.

($1 = Rs46.65)

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By: Priya Jestin

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