Sri Lanka bans legal import of ethanol to protect domestic producers

ECONOMYNEXT – Sri Lanka has banned the legal import of ethanol, the main input of ‘gal’ style arrack, the finance ministry said, in a bid to protect the domestic producers.

Finance Minister Mahinda Rajapaksa had ordered the ban has said that there is sufficient ethanol being made inside the country.

Due to high taxes on legal ethanol imports, there have been complaints that large volumes of ethanol are being smuggled in the country by powerful persons.

Ethanol is made at state sugar companies as well as a private ones.

A ban on ethanol may push up production costs of domestic arrack makers unless, smuggling expands, industry analysts say. (SB-Colombo/Jan01/2019)