India Boosts Ethanol Prices to Enhance Blending and Reduce Oil Imports

The Indian government has increased the price of molasses-derived ethanol to promote ethanol blending in petrol, aiming to reduce crude oil dependency. The revised rate marks a strategic shift towards sustainable energy, ensuring fair returns for suppliers, and bolstering the agriculture sector while advancing environmental benefits.

The Union Cabinet, under the leadership of Prime Minister Narendra Modi, has announced an upward revision in the price of ethanol made from molasses for the ongoing marketing season. This adjustment is part of the government's Ethanol Blended Petrol (EBP) Programme, which supports the use of ethanol in fuel blending. Starting from November 1, 2024, Public Sector Oil Marketing Companies (OMCs) will procure ethanol at the revised price of Rs 57.97 per litre for the Ethanol Supply Year (ESY) 2024-25, a hike from the previous rate of Rs 56.58 per litre.

This price revision is expected to not only provide price stability and adequate returns for ethanol producers but also reduce India's reliance on imported crude oil, leading to savings in foreign exchange and fostering environmental benefits. Meanwhile, GST and transportation charges will continue to be addressed separately, ensuring additional financial support for sugarcane farmers.

The government's continuous efforts in implementing the EBP Programme have significantly increased ethanol blending percentages in petrol. From 38 crore litres in 2013-14 to 707 crore litres in the current ESY 2023-24, the initiative seeks to reach an 18% blending target for ESY 2024-25. In addition, the establishment of Dedicated Ethanol Plants and innovative measures like flexi fuel vehicles are part of broader strategies to achieve self-reliance and sustainable growth for India.

(With inputs from agencies.)