State-owned sugar companies in Sri Lanka are caught in a huge surplus of unsold ethanol amid a steep fall in legally sold alcohol due to the country’s economic crisis coupled with tax hikes, State Minister for Investment Promotion Dilum Amunugama said, reports Economynext.
The state-run Lanka Sugar, which operates the Sevenagala and Pelwatte companies, has reported that it now has 1.3 million litres of unsold ethanol. Minister Amunugama noted that discussions with legal alcohol producers showed that some companies have experienced sales drops of up to 70% at times.
Apart from Sevenagala and Pelwatte, two other sugar firms, Ethimale and Gal-Oya, are also in ethanol production. To find solutions to the stockpile, Minister Amunugama stated that a verbal agreement with the Excise Department was reached for the issuance of licenses for the purchase of ethanol, in which demand would be distributed equally between the four companies so that the flow of stocks is maintained.
These import taxes also protect the sugar and ethanol industries of the country to make the domestic production price competitive. However, the country cannot export ethanol due to the high cost of production. “We cannot export as our cost of production is high,” said Minister Amunugama. The government is also examining alternative usages of ethanol, he added. “We are looking at bio-diesel. As it is, we can manage. We have not reached a point to get rid of it. The bio-fuel projects are on standby, and the Sugar Research Institute has conducted all necessary testing.”
The Minister also expressed concern over the increase in illegal sales of liquor, apparently due to high taxes. “We have requested the Treasury to reduce the tax,” Minister Amunugama said, adding, “But we do not know what will happen.”
Continue reading Chinimandi.com for more news about the Ethanol Industry
