Business News/ News / India/  Govt hikes procurement prices of ethanol for blending with petrol

New Delhi: The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, on Wednesday approved a hike in the cost of ethanol procured by the public sector oil marketing companies (OMCs) from distilleries.

The price of ethanol from C-heavy molasses has been increased from 46.66 to 49.41 per litre, the government said in a release. The price of ethanol from B-heavy molasses has been hiked from Rs.59.08 per litre to Rs.60.73 per litre.

The price of ethanol from sugarcane juice/sugar/sugar syrup has been raised from 63.45 to 65.61 per litre, the release said. Additionally, GST and transportation charges will also be payable, it added.

“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," said an official release.

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 Cabinet release said.

Remunerative price to ethanol suppliers will help in early payment to cane farmers, in the process contributing to minimize difficulty of sugarcane farmers, it further noted.

Under the Ethanol Blended Petrol (EBP) Programme, OMCs sell petrol blended with ethanol up to 10%. This programme has been extended to whole of India except Union Territories of Andaman Nicobar and Lakshadweep islands with effect from 1 April, 2019 to promote the use of alternative and environment friendly fuels. This intervention also seeks to reduce import dependence for energy requirements and give boost to agriculture sector.

“Government has notified administered price of ethanol since 2014. For the first time during 2018, differential price of ethanol based on feed stock 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 (ESY - currently defined as ethanol supply period from 1 December of a year to 30 November of the following year) to contracts of over 452 crore litre in ongoing ESY 2021-22," the release said.

The target of achieving average 10% blending has been met in June, 2022, much ahead of the target date of November, 2022.

The government has advanced the target of 20% 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, the Centre said.

“Other recent enablers include: enhancement of ethanol distillation capacity to 923 crore litre per annum; Long Term Off-take Agreements (LTOAs) to encourage setting up of 431 crore litre per annum capacity of Dedicated Ethanol Plants (DEPs) in ethanol deficit States by private players which is expected to bring in investments of Rs.25,000-Rs.30,000 crores in coming years; multimodal transportation of ethanol and ethanol blended petrol by railways and pipelines," the release said.

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Updated: 02 Nov 2022, 04:15 PM IST
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