Cabinet Okays Hikes In Rates Of Ethanol Procured By OMCs

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By: Urvashi Khona | NEW DELHI
Updated: November 2, 2022 22:45
The government has taken many decisions for the reduction of cane farmers’ dues including the diversion of sugar and sugar-based feedstock for the production of ethanol

The cabinet committee, chaired by Prime minister Narendra Modi, on Wednesday approved a hike in the price of ethanol procured by the public sector oil marketing companies (OMCs) from distilleries under the Ethanol Blended Petrol (EBP) programme.

“The Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi has approved higher ethanol price derived from different sugarcane-based raw materials under the EBP programme for the forthcoming sugar season 2022-23 during ESY 2022-23 from December 1, 2022, to October 31, 2023,” stated an official release.

The price of ethanol from the C heavy molasses route will be increased to ₹49.41 per litre from ₹46.66. Ethanol derived from B heavy molasses route will cost ₹60.73 per litre from ₹59.08 a litre now.


This will be in addition to GST and transportation charges that will also be payable.

All distilleries will be able to take benefit from the scheme and a large number of them are expected to supply ethanol for the EBP programme. A remunerative price to ethanol suppliers will help in early payment to cane farmers, in the process contributing to minimising the difficulty of sugarcane farmers.

The promotion of biofuel and the execution of its policy has got a major push since 2014. Since then the government has notified administered price of ethanol. For the first time in 2018, the differential price of ethanol based on feedstock utilized for ethanol production was announced by the Government.

These decisions have significantly improved the supply of ethanol, consequently, ethanol procurement by Public Sector OMCs has increased from 38 crore litre in Ethanol Supply Year 2013-14 to contracts of over 452 crore litre in ongoing ESY 2021-22.

The target of achieving an average of 10 per cent blending has been achieved in June 2022, much ahead of the target date of November 2022, stated the statement.

The government has advanced the target of 20 per cent ethanol blending in petrol from earlier 2030 to ESY 2025-26 and a “Roadmap for ethanol blending in India 2020-25” has been put in the public domain.

The government has been implementing EBP Programme wherein OMCs sell petrol blended with ethanol up to 10 per cent. This programme has been extended to the whole of India except the Union Territories of Andaman Nicobar and Lakshadweep islands with effect from April 1, 2019, to promote the use of alternative and environment-friendly fuels. This intervention also seeks to reduce import dependence on energy requirements and give a boost to the agriculture sector.

The government has taken many decisions for the reduction of cane farmers’ dues including the diversion of sugar and sugar-based feedstock for the production of ethanol. Now, as, a large quantity of ethanol is available right from the beginning of sugar season due to the conversion of sugarcane juice and B heavy molasses to ethanol, it has been decided to redefine Ethanol Supply Year as a period of ethanol supply from November 1 of a year to October 31 of the following year from November 1, 2023, onwards.

Moreover, as the Fair and Remunerative Price (FRP) of sugarcane and the ex-mill price of sugar have undergone changes, there is a need to revise the ex-mill price of ethanol derived from different sugarcane-based feedstocks.


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