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The committee, headed by Prime Minister Manmohan Singh, has also approved market-based pricing of the biofuel, opening the market for ethanol producers - mostly sugar companies. So far, the OMCs have been contracting ethanol at the provisional procurement price of Rs 27 per litre, fixed by the Cabinet Committee on Economic Affairs (CCEA) in August 2010.
The petroleum ministry is now likely to come up with a gazette notification and float tenders for price discovery and procurement of ethanol.
The CCEA has also allowed import of ethanol if OMCs face any shortage of the biofuel in the domestic market for blending purpose. "There is no shortage of ethanol in the country as it had produced 220 crore litres of ethanol in 2010-11. However, if need be, the OMCs may be allowed to imported for blending purpose," said a minister, who had attended the meeting.
The ethanol-blended petrol is in effect in 13 states out of 19 states mandated for EBP programme. In these 13 states also, the implementation was partial with lifting of only 44 crore litres of ethanol. The department of chemicals, which is a major user of ethanol, had been opposing the EBP programme arguing that it would hurt the chemicals industry by diverting its share of ethanol to the OMCs.
The EBP programme will require 105 crore litres of ethanol annually and will help OMCs to save cost by way of difference in the prices of ethanol and petrol. "While a litre of petrol costs around 70, ethanol costs 40 a litre.
The petroleum ministry is now likely to come up with a gazette notification and float tenders for price discovery and procurement of ethanol.
The CCEA has also allowed import of ethanol if OMCs face any shortage of the biofuel in the domestic market for blending purpose. "There is no shortage of ethanol in the country as it had produced 220 crore litres of ethanol in 2010-11. However, if need be, the OMCs may be allowed to imported for blending purpose," said a minister, who had attended the meeting.
The ethanol-blended petrol is in effect in 13 states out of 19 states mandated for EBP programme. In these 13 states also, the implementation was partial with lifting of only 44 crore litres of ethanol. The department of chemicals, which is a major user of ethanol, had been opposing the EBP programme arguing that it would hurt the chemicals industry by diverting its share of ethanol to the OMCs.
The EBP programme will require 105 crore litres of ethanol annually and will help OMCs to save cost by way of difference in the prices of ethanol and petrol. "While a litre of petrol costs around 70, ethanol costs 40 a litre.
Will this move by GOI affect BS3 petrol cars,I am worried as I own one??!!