Move has been triggered by various complaints that competition watchdog received recently
Shine Jacob & Sushmi Dey | New Delhi September 4, 2013 Last Updated at 19:36 IST
The Competition Commission of India (CCI) has initiated a probe into alleged collusion by oil marketing companies and ethanol manufacturers to manipulate prices during bidding process for ethanol.
The move has been triggered by various complaints that the competition watchdog received recently and after a preliminary study decided to refer it for probe by its Director General (Investigation).
“We have received various complaints on the issue and it looks like there is a case which need to be investigated in detail. So, it has been referred to DG-Investigation,” a senior CCI official told Business Standard.
The complainants, including liquor manufacturers such as Lords Distillery as well as life sciences companies such as Jubilant Life Sciences, which uses ethanol or industrial alcohol for chemical manufacturing, have alleged that absolutely identical prices were quoted in bids offered by various ethanol suppliers, especially in the states of Uttar Pradesh and Gujarat.
The complaints also alleged that most of the ethanol suppliers who have colluded are either members of the Indian Sugar Mills Association (ISMA) or the National Federation of Cooperative Sugar Factories Limited (NFCSF).
According to the official, the investigative arm of the CCI will also look into the role of ISMA and NFCSF.
In November 2012, the Cabinet Committee on Economic Affairs had approved five% mandatory blending of ethanol with petrol and this was notified by the Centre under the Motor Spirits Act on January 2. According to the Act, oil marketing companies (OMCs) have to record five% ethanol content in petrol by June 30 this year.
However, considering the supply orders cleared to sugar mills, the target seems unachievable. In a letter to the petro