Oil firms high on alcohol ban in Bihar

The Bihar government’s move to ban liquor sales in the state to curb alcoholism and empower women has turned out to be an opportunity for oil marketing companies (OMCs) to strengthen their ethanol blending programme (EBP).

The prohibition by Bihar Chief Minister Nitish Kumar has freed up as much as 60 million litres of ethanol.

The Union petroleum ministry has accepted a proposal by the Bihar government and asked OMCs to consider lifting entire ethanol produced by distilleries in the state.

ETHANOL BLENDING TO GET BOOST

• The Bihar government’s controversial move to ban liquor sales in the state has turned out an opportunity for oil marketing companies (OMCs)’s ethanol blending programme
  

 

 

The prohibition has freed up as much as 60 million litres of ethanol
 

The Union oil ministry has asked OMCs to consider lifting entire ethanol produced by distilleries in the state

“OMCs under the ministry of petroleum and natural gas have informed that around 60 million litres of ethanol may be produced in Bihar through the molasses route. OMCs will strive to absorb this ethanol for EBP to help the state of Bihar,” the petroleum ministry said.

The initiative is likely to generate income of around Rs 300 crore for Bihar farmers through sugar mills and distilleries, apart from aiding proper usage of molasses. The volume of ethanol likely to be diverted from Bihar will be a tenth of the total ethanol supply for EBP in sugar year 2014-15.

Having successfully implemented the prohibition in his state, Nitish Kumar has been campaigning in Uttar Pradesh, Jharkhand, and Kerala for a similar ban. He is also scheduled to visit Rajasthan and Odisha next month to drum up support for a ban on alcohol — further boosting the blending scheme.

The government is running the EBP in 21 states and four Union Territories to promote renewable energy, reduce dependency on crude oil imports, and improve remuneration to farmers.

In a bid to provide a stimulus to EBP, the Narendra Modi-led government had boosted the ethanol procurement price in December 2014, allowed an alternate route of ethanol production, and made domestic sourcing of ethanol mandatory. Ethanol supplies for the blending programme have risen from 380 million litres (30 per cent of requirement) in 2013-14 to 674 million litres in 2014-15.

This year, the OMCs have floated a tender for 2.66 billion litres of ethanol to meet the 10 per cent blending target. The ministry said there is considerable improvement in the response from the sugar sector, which has offered more than 1.35 billion litres for the current sugar year.