Visakhapatnam: Ethanol which is being blended with petrol after the Union Government’s instruction to go for 10 per cent blending, to reduce the carbon footprint is facing a supply hurdle as millers are not keen on producing it. “There is a supply crunch of ethanol as the sugar factories are not producing ethanol and selling molasses, from which ethanol is produced, due to its high price in the market,” said Chairman of Standing Committee on Petroleum and Natural Gas and Lok Sabha MP Pralhad Joshi.
Andhra Pradesh stands fourth when it comes to the production of sugarcane and it has eight sugar factories with ethanol production facility. Maharashtra, Uttar Pradesh and Karnataka are leading sugarcane producers in the country. “We are in talks with sugar mills to address the issues. I hope we will reach a consensus soon over the prices,” said Mr Joshi.
Andhra Pradesh Deputy Cane Commissioner Venkat Rao said, “Quantity of ethanol produced depends on the market price of sugar and molasses. As molasses is fetching more, millers prefer them over ethanol. The ethanol is priced at Rs 45 per litre this year while it was Rs 48 per litre last year. Though both are not bad, molasses fetches an impressive Rs 8,000 for a MT.”
Few sugar millers are of the view that storage and transportation of ethanol should be borne by millers. The conversion cost for ethanol has also gone up to 16 per cent. Incentive and proper pricing would only help improve its production. While petroleum is still outside the ambit of GST, biodiesel, ethanol and similar mixing agents have been put in the 18 per cent tax bracket. Adding the state taxes, the price of blended petrol again goes up.
When asked about the high tax on green energy, Chairman of Standing Committee on Petroleum and Natural Gas and Lok Sabha MP Pralhad Joshi said, “Though I am not directly concerned with taxation, I would like to draw the notice of the petroleum ministry, to the taxes....