Inspired by Prime Minister Narendra Modi’s roadmap of boosting ethanol production for blending in fuel, the oil marketing companies (OMCs) are revving up on the ethanol highway!
Currently, the ethanol blending in India is to the tune of 10 percent. Plans are afoot to increase it further to not only augment the farmers’ income, but slash the burgeoning oil import bill and also curb vehicular emissions.
In the latest round of bidding for the requirement of 950 million litres (ML) by the OMCs, the suppliers, mainly sugar mills, have offered to supply about 390 ML for blending in fuel.
Currently, the OMCs are examining the bids and are expected to make allocations soon. For the 2021-22 Ethanol Supply Year (ESY), the OMCs have so far allocated 3.85 billion litres (BL) of ethanol from different feed stocks.
According to the Indian Sugar Mills Association (ISMA), the OMCs have plausibly calculated ethanol requirement for 11 percent blending in the current year, which was a welcome step.
Moreover, the ethanol industry is also bullish over the Union Budget provisioning an additional excise duty of Rs 2 per litre on unblended petrol from Oct 1, 2022.
Since the bulk of ethanol is generated from sugarcane, the proposal will further catalyse ethanol production. This will insulate the domestic sugar industry from seasonal market fluctuations and provide a sustainable income to farmers.
The OMCs will also zealously procure ethanol for blending to preempt the slapping of additional excise duty Rs 2 per litre.
Meanwhile, to support the Ethanol Blending Program (EBP), the Centre has kept a provision of Rs 160 crore in the revised estimates (RE) of financial year 2021-22 and another Rs 300 crore in the budgetary estimates (BE) 2022-23 for giving financial aid to mills for augmentation of ethanol capacity.
This will promote setting up of ethanol distilleries, which in turn will help reduce surplus sugar and increase ethanol supplies to meet the blending target.
Meanwhile, Indian sugar companies have contracted for exports of 5 million tonnes (MT) in the current sugarcane crushing season 2021-22. Of this, 3.15 MT of the sweetener has already been physically shipped between Oct 2021 and Jan 2022, while 0.8 MT of sugar consignments are in the pipeline for being exported in Feb 2022.
Till Feb 15, about 22 MT of sugar has been produced by sugar mills compared to 21 MT during the corresponding period last season.