Glad tidings

Mumbai, April 3: Sugar companies are keeping their fingers crossed over the future of ethanol-blended petrol, even though oil firms may be on course to implement the programme on the Centre?s persuasion.

The earlier NDA government?s plan of mixing 5 per cent ethanol (a by product of the sugar industry) with petrol in nine states and four Union territories is now likely to be revived in a phased manner. The plan floated by the previous government could not take off successfully amid contentions that the quantum of ethanol required for the whole blending process was inadequate in the country.

Industry sources said an agreement could not be reached with the oil companies in Maharashtra, Uttar Pradesh and Uttaranchal because of differences over price.

Sources said domestic oil companies have been asked by the government to consider a revival of the earlier plan and look into the prospects of re-opening pending tenders pertaining to Maharashtra, Uttar Pradesh and Uttaranchal.

Unconfirmed reports even say that tenders for the supply of 70 million litres of ethanol in Maharashtra and 35 million litres in Karnataka have been finalised at a price of around Rs 19.50 per litre and that for Uttar Pradesh is likely to be finalised next week. These signs are considered crucial for the industry, which has spent considerably to set up distilleries for ethanol. Analysts feel that if the programme is kicked off, it could directly impact the balancesheets of leading sugar companies.

?Companies like Bajaj Hindustan Ltd could see at least Rs 100 crore added to their toplines if the ethanol programme is taken up seriously,? an analyst said.

However, few are more circumspect. ?The key issue is of continuity. This programme should be lasting and it should not be merely for a year or so,? a senior official said.