Indian firms confirm Brazil sugarcane investment pullback; cash burned by selling retail fuel at a loss during oil price surge

In India, Indian Oil, Hindustan Petroleum and Bharat Petroleum have confirmed that they will delay planned investments of more than $600 million in Brazilian sugarcane plantations. The companies said that losses on retail fuel sales forced the delays; the government forced the companies to sell fuel at a loss when oil prices soared, using up the company’s cash reserves. Indian had been seeking additional ethanol resources to fulfill an E10 mandate that will go into effect this October, and now presumably will turn to domestic production.

“Bihar, where the sugar mills are located, is India’s second largest state,” commented Biofuels Digest special correspondent Joelle Brink. “Its Chief Minister is Rabri Devi, Lalu’s wife.  And that Lalu is the chief campaign strategist of the UPA government, which must carry Bihar in order to win the upcoming elections,” Brink added.

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