Union Cabinet approves fixing of higher ethanol prices under Ethanol Blended Petrol programme

In order to facilitate setting up advanced biofuel refineries in the country, Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved the fixing of higher ethanol prices derived from different sugarcane-based raw materials under the Ethanol Blended Petrol (EBP) programme for the forthcoming sugar season 2020-21 during Ethanol Supply Year (ESY) 2020-21 from December 1, 2020, to November 30, 2021.

According to a statement issued by the CCEA, the price of ethanol from the C heavy molasses route has been increased from Rs 45.69 per litre to Rs 46.66 per litre. The price of ethanol from the B heavy molasses route has been increased from Rs 57.61 per litre to Rs 59.08 per litre.

Further, the price of ethanol from sugarcane juice, sugar/sugar syrup route has been increased from Rs 62.65 per litre to Rs 63.45 per litre. Additionally, Goods and Services Tax (GST) and transportation charges will also be payable, according to the official statement.

The government has decided that Oil PSEs should be given the freedom to decide the pricing for second-generation ethanol as this would help in setting up advanced biofuel refineries in the country.

Notably, grain-based ethanol prices are currently being decided by Oil Marketing Companies (OMCs) only.

The approval will not only facilitate the continued policy of the government in providing price stability and remunerative prices for ethanol suppliers but will also help in reducing the pending arrears of cane farmers, dependency on crude oil imports and will also help in savings in foreign exchange and bring benefits to the environment.

All distilleries will be able to take benefit from the scheme and a large number of them are expected to supply ethanol for the EBP Programme.

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

The government has notified administered price of ethanol since 2014. For the first time during 2018, the differential price of ethanol based on raw material utilized for ethanol production was announced by the Government.

These decisions have significantly improved the supply of ethanol thereby ethanol procurement by Public Sector OMCs has increased from 38 crore litre in ESY 2013-14 to contracted over 350 crore litre in ongoing ESY 2020-21, said the official statement.

( With inputs from ANI )