- The Cabinet Committee on Economic Affairs on September 3, 2019 gave its approval for revision of ethanol price for supply to Public Sector Oil Marketing Companies for procurement of ethanol. The price of ethanol from C heavy molasses route has been increased from Rs.43.46 per lit to Rs.43.75 per litre.
- Similarly, the price of ethanol from B heavy molasses route be increased from Rs.52.43 per lit to Rs.54.27 per litre and the price of ethanol from sugarcane juice/sugar/sugar syrup route be fixed at Rs.59.48 per litre.
- OMCs has been advised to continue according priority of ethanol from 1) sugarcane juice/sugar/sugar syrup, 2) B heavy molasses 3) C heavy molasses and 4) Damaged Food grains/other sources, in that order.
Ethanol Blended Petrol (EBP) Programme
- Government has been implementing Ethanol Blended Petrol (EBP) Programme wherein 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 01st 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 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 ethanol supply year 2013-14 to estimated over 200 crore litre in 2018-19.
- Consistent surplus of sugar production is depressing sugar price. Consequently, sugarcane farmer’s dues have increased due to lower capability of sugar industry to pay the farmers. Government has taken many decisions for reduction of cane farmer’s dues.
- Steps: With a view to limit sugar production in the Country and to increase domestic production of ethanol, Government has taken multiple steps including, allowing diversion of B heavy molasses and sugarcane juice for ethanol production.
- As the ex-mill price of sugar and conversion cost have undergone changes, there is a need to revise the ex-mill price of ethanol derived from different sugarcane based raw materials. There is also a demand from the industry to include sugar and sugar syrup for ethanol production to help in solving the problem of inventory and liquidity with the sugar mills.
