OMCs float tender for 124 cr litre ethanol from rice, C Heavy Molasses
India’s OMCs have floated a tender to procure 124 crore litres of ethanol for ESY 2024-25, focusing on ethanol from FCI rice and C-heavy molasses. The government targets 18% ethanol blending, with India’s production capacity sufficient for 20% blending till ESY 2025-26. The reserve price for FCI rice is ₹2,250 per quintal, while ethanol from FCI rice will be procured at ₹58.50 per litre. In ESY 2023-24, ethanol blending reached 14.6%, with 672.5 crore litres supplied, including 231.58 crore litres from sugar mills.
Domestic oil marketing companies (OMCs) on Wednesday floated a tender for procuring 124 crore litres of ethanol during the current ethanol supply year (ESY), which concludes in October this year.
The tender under Cycle 3 (C3) during ESY 2024-25 (November 2024-October 2025) has been restricted to ethanol produced from Food Corporation of India’s (FCI) subsidised rice to be sold at ₹22.50 per kg as well as C Heavy Molasses (CHM).
The government has also fixed a maximum quota of 24 lakh tonnes (lt) of rice for FCI to sell to ethanol distilleries under the ethanol blended petrol (EBP) programme.
The ethanol is to be supplied for Q2 (February 2025-April 2025) and Q3 (May 2025-July 2025) of the ESY 2024-25. The bids will be valid till July 31, 2025. The OMCs anticipate a requirement of 70.86 crore litres and 53.06 crore litres during Q2 and Q3, respectively.
The government has a target of blending 18 per cent ethanol in petrol during ESY 2024-25.
India’s ethanol production capacity is around 1,683 crore litres, which is more than sufficient to meet the 20 per cent blending mandate till October 2026 (ESY 2025-26).
Feedstock
The reserve price for sale of rice to ethanol distilleries for production of ethanol has been fixed at ₹2,250 per quintal ex-FCI godown and the validity of the rates is till June 30, 2025.
A minimum quantity of 100 kilo litres (KL) must be offered against any feedstock in a quarter.
The bidders have to offer quantities in Q2 considering the supply commencement due date of February 15, 2025 and for Q3 considering the entire supply period May 1 to July 31, 2025.
The basic rate of ethanol procured by OMCs from FCI rice shall be ₹58.50 per litre. Transportation charges and GST shall be paid extra. FCI will allocate the rice as per the quantity of ethanol allocated to distilleries in their contracts with OMCs.
On January 17, the government lowered the issue price of rice to be sold to distilleries for making ethanol to ₹22.50 per kg, as against the economic cost of ₹39.75, effectively subsidising ₹17.25 per kilogram from public exchequer. On January 7, it had instructed FCI to sell rice at a fixed price of ₹28 per kg to ethanol producers.
On Wednesday, the Union Cabinet approved a higher ex-mill price for ethanol derived from CHM at ₹57.97 per litre, up by ₹1.69, for the 2024-25 period. Prices of ethanol produced from BHM and from sugarcane juice/ sugar/ sugar syrup were left unchanged at ₹60.73 per litre and ₹65.61 per litre, respectively.
ESY 2023-24
The cumulative ethanol blending in petrol during ESY 2023-24 was 14.6 per cent. OMC PSUs are dispensing E20 fuel, or 20 per cent ethanol blended with petrol, at 17,402 Retail Outlets ( as on November 1, 2024.
In ESY 2023-24, the total ethanol supply stood at around 672.5 crore litres, which includes roughly 231.58 crore litres by sugar mills. Mills supplied about 81.81 crore litres of ethanol from B-heavy molasses (BHM), 27.58 crore litres from CHM and 55.98 crore litres from sugar syrup. Around 24 lakh tonnes of sugar (in terms of sucrose) was diverted for ethanol production.
Around 707.4 crore litres of ethanol was blended under the EBP programme during the last supply year.
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Source : The Hindu Business line
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