“The supply of ethanol from existing offers received by OMCs from B-Heavy molasses will continue,” the order read.

Nevertheless, this action raises concerns regarding the availability of sufficient ethanol stocks for blending with fuel as part of a government initiative aimed at reducing crude oil imports.

However, this move raises apprehensions about the adequacy of ethanol stocks available for blending with fuel, a crucial aspect of a government initiative aimed at diminishing reliance on crude oil imports.

Shares of major players hit lower circuits on Dalal Street on Thursday — Shree Renuka Sugar, EID Parry, Balrampur Chini Mills, and Bajaj Hindusthan Sugar saw a decline of 4.16%, 6.61%, 6.74%, and 5.45%, respectively.

Earlier it was reported that the authorities are studying a proposal to limit the use of sugarcane juice to produce the biofuel for the current season.

Insufficient rainfall adversely affected sugarcane crops in India, leading the world’s second-largest sugar producer to prolong restrictions on exports beyond October 31. The decision to curtail ethanol production is intended to prevent a further decline in sugar inventories in India, as explained by Michael McDougall, the managing director at Paragon Global Markets.

According to The Economic Times report, the matter was discussed in a meeting of the Group of Ministers held on Monday evening, which was attended by Minister of Commerce and Industry Piyush Goyal, Minister of Agriculture Narendra Singh Tomar and Home Minister Amit Shah.

“The ministers were concerned about the expected fall in the sugar production in Maharashtra and Karnataka as it could make sugar more expensive just before the general elections. There should be enough sugar available in the country before the election code of conduct comes into effect. One of the senior ministers asked the cabinet secretary to write to the Oil Marketing Companies to stop buying ethanol made from sugarcane juice and from B-heavy molasses,” sources were quoted as saying by ET.

Indian fuel retailers procure ethanol from sugar mills to incorporate it into gasoline. They were previously incurring a higher cost for ethanol derived from sugarcane juice and B-heavy molasses.

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Published: 07 Dec 2023, 05:28 PM IST