The Hindu : Karnataka News : Ethanol-petrol blending may become compulsory

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Friday, Jul 27, 2007
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Karnataka

Karnataka

Ethanol-petrol blending may become compulsory

Staff Correspondent

MYSORE: Union Agriculture Minister Sharad Pawar on Thursday said that the Government was planning to make it mandatory for oil companies to blend five per cent of ethanol with petrol.

Speaking after inaugurating a four-day valedictory of the centenary celebrations of the cooperative movement in Mysore on Thursday, Mr. Pawar said the Government would encourage production of ethanol by sugar mills and had fixed the price of ethanol at Rs. 21.50 per litre.

He hoped the Government’s decision to allow production of ethanol from molasses, a byproduct of the sugar industry, would bail out the sugar mills, which were in a financially precarious situation due to the crisis in the domestic as well as international market for sugar.

“With production of ethanol and molasses, sugar factories can generate their own resources,” he said. He said the Government will also allow sugar mills to start cogeneration to mop up the losses.

Claiming that the condition of the sugarcane industry was a world-wide phenomenon, with even sugarcane producing countries such as Brazil and Cuba suffering from a glut, Mr. Pawar said India had produced more than 300 lakh tonnes of sugarcane last year against the domestic demand for 190 lakh tonnes.

With the functioning of sugar mills becoming a financially unviable venture, the sugarcane farmers are facing the heat. He appreciated the State Government’s decision to provide a compensation of Rs. 25,000 per hectare for sugarcane farmers whose produce were not procured by sugar mills.

Package

He said the Union Government would provide a financial package to help sugar mills, which had accumulated losses during the last eight to 15 years, to come out of the red. But financial aid will be extended to sugar mills only on the condition that they pay the sugarcane farmers their outstanding dues.

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