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Appeasing the sugarcane lobby: OMCs may end up holding the baby, eventually
Jun 28: Political appeasement to the sugarcane lobby in terms of higher prices for ethanol can one day backfire on the oil marketing companies.
8The pricing of ethanol is benchmarked to the Fair & Remunerative Price (FRP) of sugar cane.
8Whereas the price of crude is based on a whole set of different parameters.
8There can arise a reverse differential between the two, and the OMCs may end up buying alcohol at a price higher than the refinery price of fuel.
8The differential will then have to be passed on to the customer or absorbed by them.
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