Oil marketing companies plan to penalise sugar mills for not delivering ethanol

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Mumbai: Sugar industry in India is struggling with many hurdles, and now it seems there trouble is likely to escalate further. Delay in the commencement of the crushing season has already impacted the financial position of sugar mills. On the other hand, oil marketing companies (OMCs) are mulling to penalise them for not delivering ethanol as committed for this season.

According to the reports, for not delivering ethanol this season, OMCs are planning to send penalty notices to sugar factories.

“Sugar millers are facing a double whammy today. The state government’s permission was not granted to start distilleries for ethanol supply, hence the delay. Now, oil marketing companies are planning to penalise them.” Ravi Gupta, president, Shree Renuka Sugars was quoted as saying by Times of India.

Due to the flood, the less availability of sugarcane and cane harvesters have affected the crushing season in Maharashtra. Crushing season in the state commenced late this year. Sugar mills in Maharashtra officially kick-started sugarcane crushing season on November 22 after they got permission from state Governor BS Koshyari in the absence of a functional state government.

As the sugar mills are burdened with a surplus, therefore government gave them boost to produce ethanol. Few months ago, the Indian government increased the ethanol price from C heavy molasses from Rs.43.46 per litre to Rs.43.75 per litre, and the cost of ethanol from B heavy molasses hiked from Rs.52.43 per litre to Rs.54.27 per litre. Price of ethanol from sugarcane juice/sugar/sugar syrup route was fixed at 59.48 per litre.

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