The central government in India may lift the base price for ethanol fuel as, due to the currently unattractive pricing, sugar mills prefer selling to manufacturers of alcohol and industrial chemicals.
In December 2014 the government increased to 10% the level of mandatory blending of ethanol with petrol in India, and set a minimum delivered price of INR 48.50-49.50 (EUR 0.66-0.67) per litre for the clean fuel. The minister of petroleum has said the government is mulling whether to raise that price, Indian daily Business Standard reported last week.
For now, sugar mills get higher prices from potable alcohol manufacturers to whom they sell rectified spirit, a byproduct of sugar and pre-form of ethanol. The potential for price hikes there is also greater, the daily said, citing a consultant at Meanwhile, the industrial chemicals industry offers even higher prices.  
For the fiscal 2015-16, oil marketing companies (OMCs) in India want to procure 2,600 million litres of ethanol for the 10% mandatory blending rule, according to the report. Local sugar mills, however, have an installed capacity of 2,240 million litres and an average 80% utilisation.

Provided by SeeNews exclusively for Essentica.