IT WAS a big win, at least for now, for the powerful Maharashtra sugar lobby when the three ministers from the state on the ethanol GoM clinched the contentious price of Rs 27/litre for ethanol at the CCEA on Monday. Under intense lobbying from ministers Vilasrao Deshmukh, Murli Deora and Sharad Pawar, the price of ethanol, although only an interim one at present, was pegged at the CCEA at the same level endorsed twice by the GoM.
Pressure from the Maharashtra lobby had pushed the issue for endorsement by the CCEA earlier too, moving it out of the purview of the GoM on ethanol. However, strong opposition from DMK leader and Chemicals minister MK Alagiri who has been batting for the chemicals and potable alcohol industry, demanding a "fair" long term price for ethanol forced the ethanol pricing issue back to the GoM.
Tamil Nadu is among the three states in the country (including Maharashtra) that earn substantially from excise duties on potable alcohol. The DMK leader argued that the GoM was set up not to decide on the price of ethanol but to reconcile differences between the many stakeholder ministries on the issue of price.
But while the battle may have been convincingly won, the war on ethanol pricing and availability for consumers other than the Ethanol Blending Programme (EBP) may still hot up even as the expert panel under Planning Commission member Saumitra Chaudhuri comes up with a long term "fair" price for the commodity.
The expert panel was vested with the brief to come up with a long term price at the behest of the minister from DMK, an old ally of Congress. Although the Monday's price is only an interim one, the Maharashtra lobby views this as pre-emptively suggesting a level of long term price to the expert panel, .
Mr Alagiri also forced the GoM to be reconstituted to include non conventional energy member Farooq Abdullah in order to give the ministerial panel a semblance of balance, but failed in this objective since Mr Abdullah was pre-occupied with the issue of trouble in his homestate.
Worse for the chemicals minister from Tamil Nadu, finance minister Pranab Mukherjee, who heads the committee, preferred to throw his weight behind the powerful Maharashtra clique, contending at the GoM that the chemical and potable alcohol industry import ethanol for its use if it fell short on account of supply to the ambitious Ethanol Blending Programme.
Interestingly, Mukherjee is seen by the ruling DMK leadership in Tamil Nadu as being pro-Jayalalithaa. TN is one among three states in the country that earn the highest excise duty from alcohol supplied by the sugar industry. As expected, the decision boosted sugar stocks for all key players including Bajaj Hindusthan, Balrampur Chini and others instantly. Sugar mills, central to Mr Pawar's constituency, were expected to be biggest, if not sole, beneficiaries.
Pressure from the Maharashtra lobby had pushed the issue for endorsement by the CCEA earlier too, moving it out of the purview of the GoM on ethanol. However, strong opposition from DMK leader and Chemicals minister MK Alagiri who has been batting for the chemicals and potable alcohol industry, demanding a "fair" long term price for ethanol forced the ethanol pricing issue back to the GoM.
Tamil Nadu is among the three states in the country (including Maharashtra) that earn substantially from excise duties on potable alcohol. The DMK leader argued that the GoM was set up not to decide on the price of ethanol but to reconcile differences between the many stakeholder ministries on the issue of price.
But while the battle may have been convincingly won, the war on ethanol pricing and availability for consumers other than the Ethanol Blending Programme (EBP) may still hot up even as the expert panel under Planning Commission member Saumitra Chaudhuri comes up with a long term "fair" price for the commodity.
The expert panel was vested with the brief to come up with a long term price at the behest of the minister from DMK, an old ally of Congress. Although the Monday's price is only an interim one, the Maharashtra lobby views this as pre-emptively suggesting a level of long term price to the expert panel, .
Mr Alagiri also forced the GoM to be reconstituted to include non conventional energy member Farooq Abdullah in order to give the ministerial panel a semblance of balance, but failed in this objective since Mr Abdullah was pre-occupied with the issue of trouble in his homestate.
Worse for the chemicals minister from Tamil Nadu, finance minister Pranab Mukherjee, who heads the committee, preferred to throw his weight behind the powerful Maharashtra clique, contending at the GoM that the chemical and potable alcohol industry import ethanol for its use if it fell short on account of supply to the ambitious Ethanol Blending Programme.
Interestingly, Mukherjee is seen by the ruling DMK leadership in Tamil Nadu as being pro-Jayalalithaa. TN is one among three states in the country that earn the highest excise duty from alcohol supplied by the sugar industry. As expected, the decision boosted sugar stocks for all key players including Bajaj Hindusthan, Balrampur Chini and others instantly. Sugar mills, central to Mr Pawar's constituency, were expected to be biggest, if not sole, beneficiaries.
