According to reports sugar mills of Riga, Narkatiaganj and Hari Nagar entered into an agreement with petroleum companies. They had produced around 15 lakh litres of ethanol about seven months ago. But even after repeated requests, the excise department has not issued permits to supply ethanol, forcing the factories to keep the huge stock with them.

Interestingly, the state government never misses any opportunity to criticize the Centre over its policy decision of not allowing setting up of industrial units which produces ethanol only using sugarcane as the raw material.

According to Naresh Bhatt the secretary of Bihar Sugar Mills Association (BSMA) they had already brought the matter to the notice of the state government.

On his part the industry department principal secretary C K Mishra assured that his department is seized with the issue and have brought the matter to the notice of the excise department. The department has assured early solution to the problem.

State’s Excise Minister Bijendra Prasad Yadav said certain issues have to be addressed before giving such permission. But the sugar producers do not appear to be enthusiastic about the assurance given by the minister. He had issued a directive to issue permits at a meeting held in August last year but the department officials did not issue the permits.

The producers anger appears genuine as non-supply of ethanol, which is used as a blender in petrol, to petroleum companies would attract penalty to the sugar factories. The BSMA member said the excise department was not issuing the permit as some of its officials were of the opinion that the production of rectified spirit, which is used for liquor manufacturing, would be more beneficial than the production of ethanol.

“If the government is allowing views of such officials to hamper our work, then how can it criticise the Centre for putting obstacles in the production of ethanol?” a BSMA member was quoted recently in an English daily, The Telegraph.

As far as the economics of ethanol and rectified spirit is concerned, a litre of ethanol gives Rs 26.5 to its producer, whereas one litre of rectified sprit carries a price tag of Rs 24. In terms of revenue, the state government would get four per cent of the ethanol price as value added tax, whereas sale of 12,000 litres of rectified sprit fetches revenue of Rs eight lakh to the state government because it is used for manufacturing several more litres of liquor.

One litre of rectified sprit is required for manufacturing 18 litres of liquor.

“If the government wants us to produce rectified spirit only, then it should increase its rate controlled by the excise department. In Bengal, the sale of a litre of rectified spirit fetches Rs 32,” said the BSMA member.

Ethanol is not the only issue, which is hampering the cause of sugar producers of Bihar. Prices of molasses, too, are an issue that BSMA wants the government to look into.

In Bihar, the sugar factories get Rs 190 for a quintal of molasses, whereas in Karnataka and Maharashtra, the producers get a rate of around Rs 300 per quintal. In Punjab the rate is Rs 700 per quintal.

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