Govt Revises Ethanol Prices to Boost Blending

30 Jan 2025 CW Team

This move aims to provide stable and remunerative pricing for ethanol suppliers while reducing India's dependency on crude oil imports, leading to foreign exchange savings and environmental benefits. The price hike of 3% is expected to ensure adequate ethanol availability, supporting the government's blending targets.

Rising Ethanol Blending in Petrol The Ethanol Blended Petrol (EBP) Programme, implemented across the country, promotes the use of cleaner and renewable fuel alternatives. Currently, OMCs blend ethanol with petrol up to 20%, significantly cutting down crude oil imports. Over the past decade, ethanol blending has saved India more than Rs 1.13 trillion in foreign exchange and replaced about 193 lakh metric tonnes of crude oil.

Ethanol procurement by OMCs has surged from 380 million litres in ESY 2013-14 to 7.07 billion litres in ESY 2023-24, achieving an average blending rate of 14.6%. The government has also advanced its target of 20% ethanol blending from 2030 to ESY 2025-26, with OMCs aiming for 18% blending in ESY 2024-25.

Infrastructure and Policy Support To meet the rising demand, India has expanded its ethanol distillation capacity to 17.13 billion litres annually. Other policy measures include:

Long-Term Off-Take Agreements (LTOAs) to establish Dedicated Ethanol Plants (DEPs) in ethanol-deficit states. Conversion of single-feed distilleries to multi-feed units. Availability of E-100 and E-20 fuels. Launch of flex-fuel vehicles. These initiatives enhance ease of doing business and align with the Atmanirbhar Bharat vision.

Boost to Investments and Employment The visibility provided by the EBP Programme has attracted investments across the country, leading to the establishment of greenfield and brownfield distilleries, improved storage, and logistics facilities. This has created employment opportunities and ensured timely payments to sugarcane farmers.

With a structured ethanol pricing policy and continuous infrastructure expansion, India is on track to achieving its ethanol blending targets, reinforcing energy security, environmental sustainability, and economic self-reliance.

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The Cabinet Committee on Economic Affairs (CCEA) has approved a revision in ethanol procurement prices for Public Sector Oil Marketing Companies (OMCs) under the Ethanol Blended Petrol (EBP) Programme for the Ethanol Supply Year (ESY) 2024-25, running from November 1, 2024, to October 31, 2025. The revised ex-mill price for ethanol derived from C Heavy Molasses (CHM) has been set at Rs 57.97 per litre, up from Rs 56.58 per litre. This move aims to provide stable and remunerative pricing for ethanol suppliers while reducing India's dependency on crude oil imports, leading to foreign exchange savings and environmental benefits. The price hike of 3% is expected to ensure adequate ethanol availability, supporting the government's blending targets. Rising Ethanol Blending in Petrol The Ethanol Blended Petrol (EBP) Programme, implemented across the country, promotes the use of cleaner and renewable fuel alternatives. Currently, OMCs blend ethanol with petrol up to 20%, significantly cutting down crude oil imports. Over the past decade, ethanol blending has saved India more than Rs 1.13 trillion in foreign exchange and replaced about 193 lakh metric tonnes of crude oil. Ethanol procurement by OMCs has surged from 380 million litres in ESY 2013-14 to 7.07 billion litres in ESY 2023-24, achieving an average blending rate of 14.6%. The government has also advanced its target of 20% ethanol blending from 2030 to ESY 2025-26, with OMCs aiming for 18% blending in ESY 2024-25. Infrastructure and Policy Support To meet the rising demand, India has expanded its ethanol distillation capacity to 17.13 billion litres annually. Other policy measures include: Long-Term Off-Take Agreements (LTOAs) to establish Dedicated Ethanol Plants (DEPs) in ethanol-deficit states. Conversion of single-feed distilleries to multi-feed units. Availability of E-100 and E-20 fuels. Launch of flex-fuel vehicles. These initiatives enhance ease of doing business and align with the Atmanirbhar Bharat vision. Boost to Investments and Employment The visibility provided by the EBP Programme has attracted investments across the country, leading to the establishment of greenfield and brownfield distilleries, improved storage, and logistics facilities. This has created employment opportunities and ensured timely payments to sugarcane farmers. With a structured ethanol pricing policy and continuous infrastructure expansion, India is on track to achieving its ethanol blending targets, reinforcing energy security, environmental sustainability, and economic self-reliance.

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