ISMA seeks ethanol price consensus by end-Aug

 "We are discussing the issue of ethanol blending virtually every week. We hope that by the end of August it will be settled. The sugar industry is looking for a long term agreement with the oil companies," he said.

According to him, the sugar industry has demanded a price of Rs 27 per litre for the blending of ethanol.

"The oil industry earlier offered a price of Rs 14-15 per litre. But the ground realities have changed since then as the price of molasses has doubled," he said.

According to him, the prevailing price of molasses is close to Rs 2,500 per ton whereas earlier it was Rs 1,200-1,300.

The central government has permitted 5% blending of ethanol with petrol.

Nopany said the country would require 587 million litre of ethanol for 5% blending.

"We have a production capacity of 1 billion litre of ethanol for the purpose of blending with petrol. This does not include ethanol used for other purposes like in chemical industry," he added.

The ISMA president argued that the ethanol blending should be increased to 10% to save foreign exchange.

"With the existing capacity, we can go up to 10% blending. We found that ethanol blended petrol is more energy efficient and it has already been proved through research in Australia," he added.