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Informist, Thursday, Feb. 6, 2025

 

By Afra Abubacker

 

NEW DELHI - Oil companies have asked distillers to supply 1.64 billion litres of ethanol in the second (Feb-Apr) and third quarters (May-Jul) of 2024-25 ethanol supply year ending October, according to market participants. Of this, almost 97% ethanol will be made from the surplus rice from the Food Corp. of India, and the remaining from C-heavy molasses, they added. 

 

According to a tender floated on Jan. 29, oil companies had invited bids for 1.24 billion litres of ethanol, but they have given supply orders for 1.64 billion litres amid active bidding by distillers, trade sources said quoting results released Thursday. The tender closed on Wednesday.

 

According to trade sources, about 1.59 billion litres of ethanol will come from FCI rice, with 829 million litres to be supplied in Feb-Apr, and 754 million litres in May-Jul. Meanwhile, 51 million litres will come from C-heavy molasses, with 34 million litres in April quarter, and 16 million in July quarter, they added. Distillers use starch containing feedstock like molasses and grains to make ethanol.

 

In a major relief to grain-based distillers, the government has reduced the FCI surplus rice price to INR 22.50 a kg from INR 28.00 a kg earlier. Amid a pile up of rice stocks in the government godowns, FCI is eager to offload its surplus rice to distillers. FCI had 29.1 million tonnes of rice as of Jan. 1, the highest opening stock for the month in a decade. 

 

The agency is yet to receive an official communication from oil companies regarding the ethanol supply allocated to each grain-based distillery, an FCI official said. 

 

Oil companies will buy ethanol made from FCI surplus rice at INR 58.50 per litre, and C-heavy molasses at INR 57.97 per litre, according to the tender. On behalf of state-owned oil marketing companies, Bharat Petroleum Corp Ltd invites distilleries to bid for ethanol supplies. Oil companies blend ethanol with petrol to reduce carbon emissions and achieve blending targets. The government has set a target of achieving 20% blending by 2025-26 (Nov-Oct) to reduce dependence on crude oil and save foreign exchange. As of December, India achieved 16.4% blending in 2024-25.  End

 

Edited by Vandana Hingorani

 

 

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