Ethanol supply to oil marketing companies for blending with petrol will rise 71 per cent in 2017-18 season to touch record 113 crore litre, helping sugar mills to earn Rs 4,500 crore revenue, according to ISMA.
Indian Sugar Mills Association (ISMA) said around 66 crore litre of ethanol was lifted by OMCs (oil marketing companies) for the ethanol blending programme in 2016-17 season (December-November). The previous record was 111 crore litre in 2015-16.
ISMA attributed the jump in ethanol supply during 2017-18 to improvement in ethanol procurement price by almost 5 per cent over last year and increase in sugarcane availability giving more molasses production.
"Out of 155 crore litre of bids submitted by sugar companies and ethanol manufacturers, 113 crore litre have been finalised for supply during 2017-18 season," ISMA said in a statement.
Tenders were floated by OMCs, inviting bids from sugar mills and ethanol manufacturers for supply of ethanol.
"At an ex-distillery procurement price of Rs 40.85 per litre and procurement of the finalised quantity of 113 crore litre, the revenue realisation during 2017-18 by sugar industry/ethanol suppliers would be over Rs 4,500 crore," ISMA said, adding this will help in making cane price payment.
Sugar companies and ethanol manufacturers submitted bids for a total quantity of 155 crore litre, the highest ever quantity offered by sugar mills and ethanol manufacturers.
ISMA said 313 crore litre of ethanol is required for 10 per cent blending across the country. The offer of 155 crore litre was sufficient for 5 per cent blending.
"Since the bids for several oil company depots were more than the required quantity of the depot for 10 per cent blending therein, proportionate quantities have been accepted by the OMCs.
"Accordingly, out of 155 crore litre of bids submitted by sugar companies and ethanol manufacturers, 113 crore litre have been finalised for supply during 2017-18 season," the statement said.
The OMCs might float a second round of tender for more quantities, ISMA hoped.
Out of the 113 crore litre finalised by OMCs, the largest quantity will be supplied by sugar companies and ethanol manufacturers in Uttar Pradesh at 44.3 crore litre, followed by Maharashtra at 40.3 crore litre.
As per the finalised quantities, the ethanol blending with petrol percentages will be excellent in UP at 9.6 per cent, followed by Maharashtra at 8.6 per cent and Bihar at 7 per cent during this season.
Sugar production of India, the world's second-largest producer, is estimated to rise at 25.1 million tonnes in the 2017-18 marketing year as against 20.2 million tonne in the previous marketing year ended September.