Home / Markets / Commodities /  Govt hikes price of ethanol used for blending in petrol

The Central government on Wednesday said that it has hiked the price of ethanol used for blending in petrol, as it looks to double the blending to 20% by 2025/26.

The Cabinet Committee on Economic Affairs (CCEA), headed by Prime Minister Narendra Modi, raised the price of ethanol extracted from sugarcane juice to 65.60 per litre from the current 63.45 per litre for the supply year beginning December 2022.

The rate for ethanol from C-heavy molasses has been increased to 49.40 per litre from 46.66 per litre currently, and that of ethanol from B-heavy to 60.73 per litre from 59.08 per litre.

“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 (Ethanol Blended Petrol) programme for the forthcoming sugar season 2022-23 during ESY 2022-23 from 1 December 2022 to 31 October, 2023," according to a statement.

The B-heavy molasses juice has some sucrose content left in them for sugar production, whereas C-heavy molasses is a cane by-product that has no sugar content left in it.

The Union Cabinet has advanced by five years its target for achieving 20% ethanol blending in petrol. The amended National Biofuel Policy-2018 has now set the new target for 2025-26 instead of 2030, apart from allowing more feedstock for production of biofuels and export of biofuels in specific cases.

Twenty per cent ethanol-blended petrol is likely to be available in the country from December or January, ahead of the April 2023 target, Union Petroleum and Natural Gas Minister Hardeep Singh Puri had said earlier.

Citing the example of Brazil where flex-fuel vehicles are available and the consumer can take ethanol or petrol as per choice, Puri had said that this will be the ultimate goal of the government.

The minister had also said that for the targeted 20% blending of ethanol in petrol, the country will need a 1,000 core litre capacity.

He added that 450 crore litre is being produced and tenders for 400 crore litre have been issued.

"We have more than enough ethanol for 20% blending," he noted.

All petrol sold in the country is targeted to have 20% ethanol by 2025. A higher blending of ethanol in petrol will help cut the country's oil import bill and benefit sugar cane farmers and sugar mills.

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