MUMBAI: The implementation of the biofuel policy by October will be anything but sweet for the government, with the sugar industry claiming that oil marketing companies are unwilling to buy ethanol at the floor price of Rs 21.50 a litre.

The government had asked oil companies to start with 5% optional blending. This, however, hasn’t taken off yet and analysts find the goal of 10% blending far-fetched.

An analyst from a leading brokerage house said that India couldn’t reach the 5% blending mark in two years. “It was stuck at around 3% aggregate. Even today oil marketing companies aren’t proactive in blending ethanol with fuel. Therefore, meeting the target of 10% blending seems unlikely,” said the analyst.

A Bharat Petroleum Corporation Ltd (BPCL) official said the company couldn’t achieve 5% ethanol blending as the product wasn’t available with the manufacturers. “Sugar manufacturers couldn’t produce the amount needed and that’s why we couldn’t meet the target,” he said. The official added that the company managed to achieve 5% ethanol blending in 14 states but couldn’t cover six states due to certain issues involving the governments of those states.

However, Vinay Kumar, the managing director of National Federation of Cooperative Sugar Factories, claimed that oil companies haven’t been asking for ethanol.
“We have spent Rs 600 crore in installing ethanol production facilities. We are waiting for oil companies to take the initiative and ask for the product, which we can supply in any quantity,” he added.