Govt considering proposal to increase ethanol prices from 2024-25 season
The government is considering raising ethanol prices for the upcoming season starting November 2024 to achieve a 20% ethanol blending target by 2025-26. This revision will be based on the fair and remunerative price of sugarcane. Current ethanol prices, unchanged since the 2022-23 season, are Rs 65.61 per litre for cane juice ethanol and lower for molasses-based ethanol. The move aims to boost ethanol production and meet green energy goals.
The government is considering a proposal to increase ethanol prices for the next season commencing November 2024, while it aims to achieve the 20% blending target by 2025-26.
Sources said that the revision of ethanol prices would be based on the fair and remunerative price of sugarcane and the price revision is aimed at meeting blending targets.
Ethanol prices, fixed by the government, have not been hiked since the 2022-23 ethanol supply year (November-October). Currently, ethanol produced from cane juice is priced at `65.61/litre, while rates for ethanol from B-Heavy and C-Heavy molasses stood at Rs 60.73/litre and `56.28/litre, respectively.
According to an official note, the blending percentage has touched 15.83% in July, 2024 and cumulative blending percentage has crossed 13% in the ongoing ethanol supply year (ESY) 2023-24.
Under the ethanol blended petrol (EBP) Programme, public sector oil marketing companies sell petrol blended with ethanol. Under EBP Programme, the blending of ethanol with petrol increased from 380 million litres in ESY 2013-14 to more than 5000 million litres in ESY 2022-23 with corresponding increase in blending percentage from 1.53% to 12.06%.
Cooperation minister Amit Shah recently said ‘we will achieve this (20% ethanol blending) target much before by 2025-26.”
The government sees the ethanol blending programme as a key to meeting its green energy commitments and improving the financial health of sugar mills.
According to an official note for meeting ethanol blending target, the government has initiated several measures including expansion of feedstock for production of ethanol, remunerative price for procurement of ethanol, lowered GST rate to 5% on ethanol, amendment in concerned legislation for free movement of ethanol across states for blending, interest subvention scheme for enhancement and augmentation of ethanol production capacity.
The country’s total ethanol production capacity currently stands at 15,890 million litres and oil marketing companies purchased 5,050 million litres of ethanol for blending purposes during 2023-24 season.
A committee is specifically looking into the revision of prices of ethanol produced from sugarcane.
