Union Cabinet meet today; proposal to hike ethanol prices likely to be considered
The Union Cabinet is set to approve higher ethanol prices for B-heavy molasses and sugarcane juice to boost blending. Ethanol blending reached 16.23% in ESY 2024-25, with a target of 18% this season and 20% by ESY 2025-26. Ethanol supply has surged, aiding fuel import reduction and supporting the Ethanol Blended Petrol Programme.
The Union Cabinet is expected to approve a proposal to increase ethanol prices during its meeting scheduled on Thursday.
According to the reports, price of ethanol produced from B-heavy molasses is set to rise.
Similarly, the price of ethanol produced from sugarcane juice is also anticipated to be increased.
This move aims to encourage oil marketing companies to boost ethanol blending.
The Cabinet may also regularize the incentives offered by Oil Marketing Companies (OMCs) for ethanol produced from C-heavy molasses. Previously, OMCs had set incentives of Rs 6.87 per liter for ethanol made from C-heavy molasses for the 2023-24 season. These incentives are expected to be regularized for the ESY 2024-25.
According to the Ministry of Petroleum & Natural Gas (MoPNG), Under Ethanol Blended Petrol (EBP) Programme, supplies of ethanol has increased from 38 crore litres in ESY 2013-14 to 707.40 crore litres in ESY 2023-24, thereby achieving an average blending of 14.60% ethanol in Petrol. For the ongoing ESY 2024-2025, ethanol blending have further improved to 16.23% as on 29th December 2024.
In the current ESY 2024-25, the total allocation (cycle 1 and cycle 2) for ethanol supply so far now stands at around 930 crore liters. In the current ESY, ethanol blending in petrol is expected to increase to 18%.
The government has set a target of 20% ethanol blending by ESY 2025-26 and is confident of achieving the same. However, to meet this target, around 1,016 crore liters of ethanol will be required, totaling 1,350 crore liters when accounting for other uses.
The push for ethanol blending is part of the government’s effort to reduce reliance on imported fuel.
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Source : Chinimandi
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