Oil cos to pay Rs 27 per litre for ethanol

Written by Press Trust of India | New Delhi | Updated: Jul 29 2010, 04:41am hrs
Oil companies will pay an interim price of Rs 27 per litre for ethanol, which they will buy from the sugar mills for doping in petrol, and a final price will be fixed after an expert committee submits its report.

"This is an interim price that the EGoM has approved. The final price will depend on the recommendations of an expert committee appointed for the purpose," oil secretary S Sundareshan said on Tuesday, when asked about the outcome of an Empowered Group of Ministers (EGoM) meet last evening. The EGoM had fixed the price at Rs 27 for a litre of ethanol in April this year as well.

In October 2007, the Cabinet had made mandatory 5% ethanol blending across the country, with the exception of Jammu & Kashmir, North-East and island territories.

However, the petroleum ministry had not been able to implement the decision due to non-availability of the product.

In March this year, the government had constituted the EGoM to resolve differences over mixing of ethanol in petrol.

The chemical ministry was objecting to the use of ethanol for petrol-blending, stating the price of molasses they use for manufacturing liquor has gone up. Both ethanol and alcohol are made from molasses and the sugar industry had estimated a production of 160 crore litres in 2009-10. Potable liquor sector needs about 100 crore litre while the 5% ethanol-blending programme would require 68 crore litre.