Oil marketing companies have not been able to procure the required ethanol for blending it with petrol. OMCs had floated tenders to procure ethanol from producers in July 2013 which received lukewarm response from the producers with only four vendors taking part in price negotiations. Out of these four vendors, two had asked for more time to come up with best offer price while other two refused to supply ethanol at price offered (at a net delivered price between Rs 41-44/litre) by OMCs. As a result OMCs had to float a supplementary tender in January 2014 to meet the balance requirement of 24.3 crore litres for supply between March 2014 upto November 2014. As a result of poor response, it is likely that only 1.5% ethanol blending will be achieved during the current year as against 5% blending targeted by the government.
OMCs had floated tenders in July 2013 for 133 crore liters of ethanol but the quantity offered by the vendors was only 61.8 crore liters. However, after negotiations, only 24.7 crore litres of quantity was finalized. The main reasons cited for poor response from vendors are demand-supply mismatch and low price offered by the OMCs.
