(BS)
The petrol-ethanol blending programme faces an acute shortage due to a deficient sugarcane output and withdrawal of the excise duty exemption by the government. To achieve the target 10 per cent blend, oil companies issued their first tender on October 22, 2016, for 2.8 billion litres of ethanol to be supplied between December 2016 and November 2017. In response, sugar mills offered and contracted for 780 million litres.
“Sugarcane output was 20-25 per cent lower than last year, resulting in a proportionate decline in ethanol production. Lower crushing of cane doubled the price of molasses, the raw material for ethanol. Sugar mills prefer to sell molasses rather than ethanol after incurring a conversion cost of 15-16 per cent. The government also withdrew the excise duty exemption of Rs 4-5 a litre on ethanol,” said an industry executive.
