A tender issued last month by state-owned oil refiners Indian Oil Corp.,Bharat Petroleum Corp. Ltd., and Hindustan Petroleum Corp. Ltd., seeking 1.05 billion liters of ethanol received offers from manufacturers across the country, officials said.
The volume will cover the oil companies' 5% blending requirement for one year. Supply orders are likely to be issued by mid-September and supplies will start from October 1, an official with a sugar company said.
Unlike last year, when only 40% of the volume demanded by oil companies was offered, the recent tender saw offers for volumes only a "little short of 1.05 billion liters," the sugar company official said.
The improvement in supplies can be attributed to the government raising the price of ethanol from Rupees 21.50/liter to Rupees 27/liter last month.
Ethanol-blended gasoline was introduced in India in 2004 but was only sold in the country's nine sugar-producing states and three union territories.The government had planned to mandate 5% blending across the country back in October 2007 but that plan has faced several setbacks due to infrastructure bottlenecks and inability of refiners and sugar producers to arrive at a mutually acceptable price of ethanol.
In a bid to give the blending program a fresh impetus, India's Cabinet Committee of Economic Affaris has given the sugar and oil industry a set of guidelines including penalties for failure to supply and failure to lift, officials said.
"Because of past experience, stiff conditions have been put in place. But they [the CCEA] are ready to relax them based on mutual understanding and agreement. Within our industry association we have decided not to encourage defaulters," the sugar company official said.
CCEA had also said that oil companies will bear the cost of transporting ethanol from the factory to the blending depot while actual transportation will be the responsibility of the ethanol manufacturers.
The CCEA has also suggested that a working group be constituted for allocating quantities and locations amongst suppliers and to ascertain availability of ethanol and recommend the blend percentage in the states and union territories up to a limit of 10%.
China Chemical Weekly: http://news.chemnet.com/en/detail-1411716.html
