New Delhi: Shares of sugar companies shot up as much as 8 per cent on Thursday after the government brought forward the deadline for attaining 20 per cent ethanol-blending with petrol by two years to 2023. This is likely to reduce India’s dependency on costly oil imports.
“The Central Government hereby directs that the oil companies shall sell ethanol-blended petrol with a percentage of ethanol up to 20 per cent as per the Bureau of Indian Standards specifications, in the whole of the States and union territories,” the Oil Ministry said in a Gazette notification which would come into effect from April 2023. The move will help India cut oil import bill and also reduce carbon dioxide pollution in cities.
Shares of Balrampur Chini Mills rallied 8 per cent to Rs 325.85, whereas Rana Sugars showed similar gains to trade at Rs 15.92. Shree Renuka Sugars and Bajaj Hindustan hit upper circuit limits of 5 per cent to Rs 15.65 and Rs 11.70, respectively.
Other companies like Dalmia Bharat Sugars, Triveni Engineering, Bannari Aman Sugars, Dhampur Sugar, EID Parry, Andhra Sugar, Avadh Sugar, Uttam Sugar, Dwarikesh Sugar and DCM Shriram Industries gained between 3-6 per cent during intraday trade.
In a release, Indian Sugar Mill Association (ISMA) said on the ethanol front, against the total Letter of Intent quantity of 346.52 crore litres, 321.18 crore litres were contracted for and 145.38 crore litres of ethanol were supplied, as on May 24, 2021.
On an average, in the current ethanol supply year (December 2020 to November 2021), the blending percentage is 7.56 per cent, it said. “Meanwhile, oil companies have floated expressions of interest (EOI), inviting bids from producers for another 26 crore litres of ethanol for supply till November 30,” ISMA added.
India has been giving soft loans to sugar mills to increase ethanol production capacity by adding distillation infrastructure to existing plants.
Domestic sugar industry has been the favourite due to global and domestic considerations. Reduced output from other nations like Thailand, Brazil has kept the supply tight and India is more focused to produce ethanol from sugar and excess food grains.