The Maharashtra government on Monday agreed to withdraw export duty of Rs 1.50 per litre on ethanol. This was the outcome of a meeting between the state?s chief minister Vilasrao Deshmukh and the petroleum minister Murli Deora.
Deora argued that removal of export duty on ethanol would help the ethanol producers, mainly co-operative and private sugar units from Maharashtra, to supply to other states. Deora said that the imposition of an export fee of Rs 1,500 per kilolitre (Rs 1.50 per litre) on supplies to other states was a major roadblock. Deshmukh told reporters that the state had taken a decision to withdraw the export duty following a stay by the Supreme Court.
The chief minister, who was accompanied by rural development minister Vijaysinh Mohite Patil, said that the state had an ethanol manufacturing capacity of 80 crore litre through 65 co-operative and private sugar mills.
The chief minister demanded that oil marketing companies should directly procure ethanol at Rs 21.50 per litre, the price fixed by the Union cabinet, and not through the present tender process.
Deora, however, said that the removal of tender process would cause certain administrative and procedural problems to the oil marketing companies. He assured that a meeting would soon be called in New Delhi to find an amicable solution.
Deora said that under the Centre?s ethanol blending programme (EBP), 19.35 crore litre had been procured as on December 31, 2007 against a total requirement of 180 crore litre for three years.
He said that oil marketing companies had contracted 140 crore litre, adding that the decision to increase ethanol blending to 10% from October 2008 from the present level of 5% would be taken only after proper scrutiny. Deora called upon the Maharashtra government to further reduce sales tax on auto fuel and rationalise octroi.