The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved raising the price of ethanol made from various sugarcane-based raw materials in the range of 2.8 to 5.9 per cent for the upcoming sugar season of 2022–23.

For Ethanol Supply Year (ESY) 2022–23 (December 2022 to October 2023), the procurement price of ethanol from C-heavy molasses has been raised from ₹46.66 per litre to ₹49.41. Prices of making ethanol from B-heavy molasses will increase from ₹59.08 per litre to ₹60.73 per litre, and from sugarcane juice or sugar syrup, will rise from ₹63.45 a litre to ₹65.61.

Change in ESY

The government also changed the ESY from November to October, against December to November earlier. Around 452 crore litres of ethanol were blended in ESY 2021–22, which ends in November 2022. For the next season, the Centre targets a procurement of 540 crore litres.

Oil Minister HS Puri told media, “We are not going to stop at 20 per cent. We will try to achieve 20 per cent ethanol blending before 2024–25. India to accelerate its ethanol blending programme. Not announcing anything yet, but sharing a perspective.”

Industry welcomes move

Industry body ISMA said the revised prices of ethanol made from C-heavy molasses and B-heavy molasses will encourage sugar mills to divert more sugar towards ethanol production. ESY 2022–2023 is a crucial year, as India is expected to achieve 12 per cent blending.

However, the price revision of ethanol from sugarcane juice or sugar syrup is not enough to drive additional investments in new capacity building. Industry has recommended many times to the government that this price be based on return on equity with a payback period of 5 years. The derived price based on ROE works out to ₹69.85 a litre, ISMA DG Sonjoy Mohanty said.

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