Cabinet hikes price of ethanol procured by OMCs

A bioethanol plant (Representative image: Wikimedia Commons)

The Union Cabinet on November 2 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 1st December 2022 to 31st October, 2023," stated an official release.

The price of ethanol from C heavy molasses route will be increased from Rs 46.66 to Rs 49.41 per litre, the government said.

Ethanol derived from B heavy molasses route will be charged at Rs 60.73 per litre from December 1. The current cost of the product is Rs.59.08 a litre.

​The price of ethanol from sugarcane juice/sugar/sugar syrup route will be increased from Rs 63.45 to Rs 65.61 per litre, the release added.  Additionally, GST and transportation charges will also be payable, it further noted.

“We will expand the ethanol production from C heavy molasis to B heavy molasis, and also include sugar cane juice and other feedstock," Union Minister Hardeep Singh Puri said, adding that other feedstock include corn, rice husk, agriculture waste and bamboo.

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Commenting on the start of the sugar season from December, when the increased prices will come into effect, Puri said, "In the old timeline, the crushing used to happen but since the year used to start later people were not releasing the stock as they expected the price will increase. So, we are taking a step to rectify it."

All distilleries will be able to take benefit of the scheme and large number of them are expected to supply ethanol for the EBP programme, the government's media statement added..

Under the EBP programme, OMCs sell petrol blended with ethanol up to 10 percent. This programme has been extended to whole of India except the Union territories of Andaman Nicobar and Lakshadweep islands with effect from April 2019, in order to promote the use of alternative and environment friendly fuels.

According to Puri, the government "will save Rs 40,000 crore on crude oil prices due to 10 percent ethanol blending".

In the release issued by the Centre following the Cabinet's decision, it was stated that the government has advanced the target of 20 percent 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 public domain.