In the current sugar year, 163 litres of ethanol are being supplied. Sugar mills are expected to double the ethanol supply by 2020.
Sugar stocks continued to witness buying on Monday after a media report indicated that the government is planning to provide funding to set up an ethanol plant.
To boost ethanol production, the government is planning to provide financial help to sugar companies, reports Network18 quoting sources.
The government targets to increase ethanol's limit in petrol to 20 percent from current level of 10 percent, hence, it may approve loan to set up an ethanol plant, sources said.
Sources said that the government is being asked to approve interest credit of Rs 1,500 crore to mills. Till now, the government has approved loan of Rs 4,400 crore to mills.
As the crude oil prices are on the rise in the international market and the country imports more than 85 percent of oil requirement, the government has been slowly boosting ethanol production to reduce oil import burden.
A Prime Minister-led meeting on Friday had a discussion on increasing ethanol production. Sources told Network18 that states may give discounts on export-import fee on ethanol.
Madhya Pradesh and Chhattisgarh removed export-import fee on ethanol while UP, Haryana & Punjab may remove export-import fee on ethanol soon.
Sources said 250 crore litres of ethanol may be supplied in next sugar year. The sugar companies follow October-September as their financial year.In the current sugar year, 163 litres of ethanol are being supplied. Sugar mills are expected to double the ethanol supply by 2020.