Fuel vs booze conflicts erupt in India's ethanol industry

In India, sugar mills are reluctant to sell ethanol to petroleum companies this year, as ethanol prices are higher if sold to the alcohol industry.

Last year, India’s government launched an ethanol-blending program to reduce automobile pollution and to promote low-carbon transport. Oil companies have since released tenders for purchasing over one billion liters, but ethanol manufacturers have only bid for 60% of the quantity.

In 2010, petroleum companies purchased ethanol at Rs 27/liter (US$0.59) from ethanol manufacturing units attached to sugar mills, as alcohol prices were only about Rs 20/litre (US$0.43). However, prices of rectified spirit have now risen to Rs 35-36/litre (US$0.76-78).