Chemicals & Fertilisers Ministry has written to the Petroleum Ministry conveying concerns of chemical industry that compulsory blending of ethanol has led to rise in its prices and reduced availability.
In November, 2012, the Cabinet Committee on Economic Affairs had decided that 5 per cent mandatory ethanol blending with petrol should be implemented across the country and achieved by June, 2013.
Yesterday, the Petroleum Minister Dharmendra Pradhan has also said that cabinet will soon take a decision on 10 per cent mandatory ethanol blending(with petroleum).
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"The chemical industry apprehends that mandatory blending of ethanol in petrol is leading to rise in prices of ethanol, as well as its diminished availability for chemical industry. Their view has been conveyed to the Ministry of Petroleum & Natural Gas," Minister of state for Chemicals and Fertilisers Nihal Chand has said in a written reply to Lok Sabha.
According to sources, the ministry in the letter has conveyed that the compulsory blending of ethanol has resulted in its shortage and irrational rise in its prices, which is affecting the chemical industry.
Average annual production of ethanol in the country is estimated at 220 crore litres; out of which 125-130 crore litres is used by potable sector (liquor).
The annual requirement of chemicals sector is around 90-100 crore litres, while 105 crore litres is required for 5 per cent compulsory blending in petrol, sources added.
The compulsory blending has resulted in shortage of about 90-100 crore litres per annum, they added.
Meanwhile, the oil marketing companies have been able to achieve only 1.37 per cent blending so far.
Meanwhile, chemical industry has said is open to ethanol blending in petrol, but opposed to making it compulsory.
Industrial ethanol, a byproduct of sugarcane crushing is an important raw material for paint and ink, agrochemicals, pharmaceuticals, textiles and polyethylene terephthalate (PET) bottles.
