Government Likely to Push Price Margins of Ethanol Bought by Oil Companies

Continuous weakness in the overall revenue made by sugar mills has pressurised government to undertake initiatives to avail rebound in profit bearings at the back of Ethanol production. As per the latest declaration, government is likely to widen price margins of Ethanol bought from sugar mills by the Oil Companies by around 5-7 per cent. This step is an initiative to assist sugar mills with their pending cane arrears which rose to INR 2000 million in July. Furthermore, it is aimed to promote the mills to channel excess sugar and cane into Ethanol production to avoid inventory pile ups of molasses feedstock. Analysts predicts that it will result in another surge in the upward trajectory being followed by Ethanol since last two quarters on its rising requirements amid Coronavirus uncertainties. As a part of green energy initiative, government is focussing to wield organic Ethanol for widespread industrial applications and for gasoline blending. It has even asked sugar mills to utilize over 85 per cent of Ethanol capacity, targeting the production of over 3620 Million litres of Ethanol by 2021.