Centre on Wednesday increased the procurement price of ethanol for its ethanol blending programme (EBP) for the forthcoming sugarcane season.

The Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi on Wednesday gave its approval for higher ethanol prices derived from different sugarcane-based raw materials. While 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 B heavy molasses would be increased from Rs. 57.61 per litre to Rs. 59.08 per litre.

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The price of ethanol from sugarcane juice, sugar/sugar syrup route has been fixed to Rs 63.45 per litre from the previous price of Rs 62.65 per litre, said the Minister of State for Finance Anurag Thakur. He said additionally, GST and transportation charges would also be payable by the Oil Marketing Companies.

The Centre has also asked Public Sector Oil Marketing Companies to decide the pricing for 2G ethanol on its own as this would help in setting up advanced biofuel refineries in the country, Anurag Thakur said. Presently the grain-based ethanol prices are also being decided by Oil Marketing Companies (OMCs).

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

All distilleries can avail the benefit of the scheme and a large number of them are expected to supply ethanol for the EBP Programme, the Minister said.

India has been implementing Ethanol Blended Petrol (EBP) Programme wherein Oil Marketing Companies (OMCs) sell petrol blended with ethanol up to 10%. The government had notified the administered price of ethanol in 2014. But in 2018, it introduced the differential price of ethanol-based on raw material utilized for ethanol production, which significantly improved the supply of ethanol, the Minister said.

As a result, the ethanol procurement by Public Sector OMCs increased from 38 crore litre in Ethanol Supply Year (ESY) 2013-14 to over 350 crore litre in ongoing ESY 2020-21, the Minister said.