PSU oil firms like IOC, BPCL and HPCL invite EoI for ethanol at new price

NEW DELHI: State-run oil marketing companies have decided on a base price of Rs 44 per litre for procuring ethanol from sugar mills, rejecting supply of 36 crore litre citing higher price even as the government-mandated ethanol blending programme entails an open tendering process. Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation have invited ‘expression of interest’ for supply of 25 crore litre of ethanol at this price and 10% above it at 30 locations.

The letter issued by the three firms, a copy of which has been reviewed by ET, invites expression of interest for “indigenous denatured anhydrous ethanol (produced from molasses only)” at 30 industry locations. “The rates indicated in this EOI document are based on the location-wise finalised net delivered cost ( NDC), including Vat setoff (wherever applicable), as per the e-tender of July 2013,” the letter says.

ET had last week reported that the three companies had submitted to the ministry of petroleum and natural gas that they would set a benchmark price for procuring ethanol, over and above which they would not accept any supply.

This has added confusion to the mandatory 5% ethanol blending in petrol, as directed by the Cabinet Committee of Economic Affairs since July 2013, said a senior sugar industry executive.

“Earlier the oil companies were not procuring ethanol citing high price as the reason. Now, they have self-decided a base price and cancelled such a huge amount of ethanol supply,” said the official, who did not wish to be named.