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Government to align ethanol price with global market
After paying a fixed price for ethanol used for doping in petrol, the government said it will move towards ‘market dynamic’ pricing system where rates would move in tandem with international trend. In a bid to boost agrarian economy, the government had in December 2014 fixed a price of Rs 48.50-49.50 per litre for ethanol public sector oil companies were to buy from sugar mills for blending with petrol. This rate is about 20 per cent more than the current cost of producing petrol .. We want to link the price to market dynamics. Government will move towards market dynamic pricing system,” Oil Minister Dharmendra Pradhan said at conference on bio-fuels here.
He said at present 10 per cent sugarcane extracted ethanol is being mixed with petrol and sold in eight sugarcane producing states of Uttar Pradesh, Karnataka, Maharashtra, Andhra Pradesh, Telangana, Haryana, DELHI and Bihar. At the remaining places, 5 per cent ethanol is being mixed in petrol. Also, doping of non-edible oil, called bio-diesel, in diesel will begin this fiscal with 110 million litres being contracted, he said. Pradhan said with India’s fuel demand slated to rise exponentially, ethanol and bio-diesel market of Rs 65 billion can jump to Rs 1000 billion in next few years.
By 2022, 4.50 billion litre of ethanol, costing about Rs 230 billion, and 6.75 billion litre of bio-diesel, worth Rs 270 billion, would be required considering a nominal fuel growth of 5-6 per cent, he said adding the requirement would be substantially higher if the 2014-15 and 15-16 growth average of 11-12 per cent is taken. Craig Kimbrel Authentic Jersey
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