GOVT MAY BLACKLIST ETHANOL MAKERS ON FAILURE TO SUPPLY

The central government, which has stepped up efforts for the blending of ethanol in a 5 percent proportion with petrol, has threatened to blacklist ethanol manufacturers if they fail to supply the commodity to oil marketing companies (OMCs).

Food and Agriculture Minister Sharad Pawar has asked the ethanol producers not to dilly-dally over the supply and soon enter into an arrangement with the OMCs at Rs 27 per litre (at ex-mill rates). OMCs have offered to keep the ethanol price stable at Rs 27 per litre for three years. However, this rate does not include excise duty, transportation cost and other expenses. The zone-wise price of ethanol will differ after adding all these costs.

Pawar's warning comes at a time when a large number of ethanol manufacturers, especially cooperative sugar mills, are reluctant to supply, on the grounds that this would incur loss in the first year at the proposed procurement price of Rs 27 per litre. Instead, they are eager to sell molasses, currently priced at Rs 5,500 per tonne. Informed sources said today that OMCs, including Indian Oil Corporation, Bharat Petrolum Corporation and Hindustan Petroleum Corporation, are expected to hold talks with ethanol manufacturers this week to chalk out a final roadmap on this issue.

According to the oil ministry data, the 5 percent ethanol blending programme (EBP) is being carried out in 16 states and 3 Union Territories (UTs) out of 20 states and 4 UTs identified for implementing the programme. The requirement of ethanol for the three-year period is 1.8 billion litres. The OMCs have been able to contract 1.46 billion litres. They had procured 573.3 million litres under the programme as on August 2009. Under this programme, ethanol releases are yet to start in Orissa, Chhattisgarh, West Bengal, Tamil Nadu, Kerala, Jharkhand and Puducherry, where the programme has not taken shape due to non-resolution of issues like procedural problem and taxation policy, affecting the commercial viability in the implementation of the programme.

The parliamentary standing committee on petroleum and natural gas recommended that, "Considering the present constraints and the fact that oil companies have been able to procure only 573.3 million litre of ethanol, the Committee desires that 5 percent EBP may be implemented in a curtailed form in a few states to make it more relevant and effective and the government to come up with a strategy to increase ethanol supply in a time-bound manner instead of leaving the matter open- ended without any time frame."
DIESEL IMPORT ON THE CARDS
Richa Mishra, New Delhi....The Hindu Business Line
The public sector oil refiners, already hard pressed to meet the growing diesel demand, now face another hurdle, as they get ready to switch towards producing cleaner fuel from April 1. Imports of diesel look inevitable, to bridge the gap arising from the fall in output over the six months, industry sources said. According to estimates, in January-June, the domestic diesel output will fall short by 10 percent, in the range of 0.6-0.8 million tones a month.

From April 1, the Government plans to introduce Euro IV-compliant fuel in 13 cities, namely Delhi/NCR, Hyderabad, Kanpur, Pune, Lucknow, Surat, Ahmedabad, Agra, Kolkata, Mumbai, Chennai, Bengaluru, and Solapur, while the rest of the country will switch over to Euro III-compliant fuel. Asked how ready are the IOC refineries to meet the April 1deadline, Bankapur said the major refineries - Panipat and Mathura - are going according to schedule, but there is a slight delay in implementation of the Gujarat refinery project. Mathura will be ready by the end of this month and IOC is expecting to commission the Gujarat refinery by the end of this fiscal (2009-10).
Sanjay Jog, Mumbai .....Business Standard...newspaper