Ethanol price to go up by ₹2.85 a litre

Coming to the aid of cash-starved sugar mills, the Cabinet Committee on Economic Affairs has decided to raise the prices of ethanol derived out of molasses by ₹2.85 a litre.

The Committee decided to raise the price of ethanol derived out of C-heavy molasses to ₹43.70 per litre from ₹40.85, excluding GST and transportation charges.

Similarly, for the first time, the CCEA has fixed the price of ethanol derived from B-heavy molasses and sugarcane juice at ₹47.49 per litre, excluding GST and transportation charges. These prices are based on the estimated Fixed and Remunerative Price of sugarcane and will be applicable for the ethanol supply year, starting December 2018 and ending November 2019.

“On the one hand, the new price mechanism will help sugar mills by providing a higher price, which, in turn will help the farmer; on the other hand this will lower the crude oil import bill,” Interim Finance Minister Piyush Goyal told reporters here.

He also said that this will be one more step towards achieving 10 per cent ethanol blending, for which 313 crore litres of ethanol is required, according to industry body ISMA. More ethanol blending translated into lower crude imports.

The ethanol procured by Indian Oil, HPCL and Bharat Petroleum has increased from 38 crore litres in 2013-14 to an estimated 140 crore litres in 2017-18. Mills are expecting revenue realisation of over ₹5,000 crore from sale of ethanol to OMCs during the 2017-18 sugar season (October-September).

The Ethanol Blended Petrol (EBP) Programme was launched by the government in 2003 on a pilot basis, ad has been subsequently extended to 21 States and 4 UTs.

A government statement, issued after a Cabinet meeting, said that ethanol availability for the EBP Programme is expected to increase significantly due to the higher price for C-heavy molasses-based ethanol and enabling procurement of ethanol from B-heavy molasses and sugarcane juice for the first time.