India well short of meeting E5 mandate in actual procurement, news service says

In India, the Hindu Business Line has weighed in one the continuing debate over whether India has secured enough ethanol to meet its E5 mandate.

The news service reports that three state-owned oil marketing companies have fallen well short of their ethanol procurement requirements in support of E5. Contracts signed by the companies last November called for procurement at an average monthly rate of 8.5 million gallons per month, but actual procurement has averaged 2.3 million gallons per month. The companies blamed high taxes, prompting Bihar and Jharkhand states to reduce import levies in an attempt to stimulate procurement.

The Times of India previously reported that the country was well short of meeting E5 in actual procurement, prompting assurances from local business that they had secured all necessary ethanol to meet the mandate. India is considering imposing an E10 mandate as the country struggles to maintain growth in the wake of rising global oil prices.

India places a very high tax on alcohol production including corn ethanol, and state production incentives have been scarce as the states contemplate the impact of incentives on their tax receipts.

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