The Prime Minister's office has convened tomorrow a meeting with top officials of Food and Petroleum Ministries to discuss ways to promote ethanol blending with petrol in view of surplus sugar production in the country.
At present, it is compulsory to blend 5 per cent ethanol with petroleum but the oil marketing companies have achieved around 2 per cent. The new government wants to further increase the level of mandatory blending of ethanol with petrol to 10 per cent.
"The PMO has scheduled a meeting tomorrow to discuss problems related to implementation of the ethanol blending programme," an official source said.
According to sources in the sugar industry, there is a difficulty in implementing the programme due to lower prices offered by oil marketing companies for ethanol. Sugar mills get higher realisation from selling portable alcohol.
"In view of surplus sugar production, we can divert more ethanol for blending with petrol provided mills are compensated with better price," an industry official said.
Currently, oil marketing companies are offering ex-mill price of Rs 41 per litre of ethanol, while the industry is demanding at least Rs 50 per litre.
Besides the price issue, the industry is also facing problems in transportation of ethanol to oil marketing companies due to delay in getting the excise permission.
"We are facing delay in getting excise permission. Mills face penalty if ethanol is not delivered on time," the industry official said.
The country requires 156 crore litres of ethanol for blending 10 per cent ethanol blending with petrol in seven sugarcane growing states and five per cent blending in other states.
