Ethanol buy to knock back OMCs by Rs 95 cr in GST regime

With an 18 per cent proposed GST, govt indicats no room for subsidy for ethanol procurement

Oil-marketing companies (OMCs) will have to bear an additional burden of Rs95 crore on their books for procuring ethanol this year with the introduction of the goods and services tax (GST).

The three OMCs, Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) had issued tenders for procuring around 2,880 million litres of ethanol accumulatively for the current season, which is ending in November. 

Owing to the lack of enough cane for crushing, sugar mills have offered a lower amount of ethanol, and OMCs have finalised contracts with sugar mills for 806.9 million litres.