The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, on Wednesday, approved a mechanism for procurement of ethanol by public sector Oil Marketing Companies (OMCs) under Ethanol Blended Petrol (EBP) programme.

The CCEA has approved higher ethanol price derived from different sugarcane based raw materials under the EBP programme for the forthcoming sugar season 2022-23 during ESY 2022-23 from 1 December, 2022 to 31 October, 2023.

“The price of ethanol from C heavy molasses route be increased from Rs 46.66 per litre to Rs 49.41 per litre, the price of ethanol from B heavy molasses route be increased from Rs 59.08 per litre to Rs 60.73 per litre, the price of ethanol from sugarcane juice/sugar/sugar syrup route be increased from Rs 63.45 per litre to Rs 65.61 per litre and additionally, GST and transportation charges will also be payable,” an official statement said.

All distilleries will be able to take benefit of the scheme and a large number of them are expected to supply ethanol for the EBP programme. Remunerative price to ethanol suppliers will help in early payment to cane farmers, in the process contributing to minimise difficulty of sugarcane farmers.

The Government has been implementing the EBP programme wherein OMCs sell petrol blended with ethanol up to 10 per cent. This programme has been extended to the whole of India except Union Territories of Andaman Nicobar and Lakshadweep islands with effect from 1 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 a boost to the agriculture sector.

The Government has notified the administered price of ethanol since 2014. For the first time during 2018, the differential price of ethanol based on feed stock utilised for ethanol production was announced by the Government.

These decisions have significantly improved the supply of ethanol, consequently ethanol procurement by Public Sector OMCs has increased from 38 crore litre in Ethanol Supply Year 2013-14 (ESY – currently defined as ethanol supply period from 1 December of a year to 30 November of the following year) to contracts of over 452 crore litre in ongoing ESY 2021-22.  The target of achieving average 10 per cent blending has been achieved in June much ahead of the target date of November.