Penalty on sugar mills for mixing ethanol with petrol

The Competition Commission imposed penalty on sugar mills for mixing ethanol with petrol

The Competition Commission on Tuesday has imposed a fine of Rs 38.05 crore on 18 sugar mills and two business groups as a result of rigging and tie-in with the shared tenders invited by Oil Marketing Companies (OMCs) to purchase ethanol for mixing petrol.

The regulator also directed the sugar mills and associations- Indian Sugar Mills Association (ISMA) and Indian Ethnol Manufacturers Association (EMAI) that they do not violate Section 3 of the Company Act. Section 3 deals with non-competitive agreements.

Oil marketing companies (OMCs) - Indian Oil Corporation Limited, Hindustan Petroleum Corporation Limited and Bharat Petroleum Corporation Limited had invited renders from the alcohol producers for supply of ethanol in January 2013 through joint tender.

 It is said in an official statement that, while imposing the penalty, the commission imposed a fine on revenue generated from the sale of only ethanol under the principle of relevant business.