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Ethanol imports from Brazil not a viable option: Experts
It is not mandatory for oil marketing companies to sell ethanol blended petrol from November. What does this mean for domestic ethanol makers, especially those who have expanded capacity in anticipation of the move? Investment Advisor SP Tulsian and Narendra Murkumbi of Shree Renuka Sugars give their views.
So this is not a new process. We are used to that tender, in fact the wording is the same as the last two years. So I do not see too much hiccups in terms of finalising the tenders. The oil marketing companies are saving Rs 7 a litre if they buy ethanol for doping as compared to the petrol that it displaces. So there is a commercial sound logic to it. I agree with Mr Tulsian that it is not viable to import out of Brazil in the foreseeable future.
Q: Do you see it starting on November 1?
Murkumbi: Yes, I think in the states where sugarcane is grown, definitely it will roll out. In other states, we have problems more at the state government level, where state governments do not allow free transport of ethanol across state borders. So the surplus states want to keep their ethanol within the state for other uses like portable alcohol etc.
So these problems actually need to be tackled at the Ccentral government level. These are some of the teething problems that result from any new sector that opens up. So that is where I would see some delay happening. Ten new states have been inducted into the doping programme this time; last time, it was 350 million litre and now it is 580 million litre of ethanol per year.
Q: So there is no big cause for worry, just teething problem?
