Indian cabinet approves ethanol price hike by up to Rs 1.47 per litre for blending with petrol

The government hiked the price of ethanol extracted from sugarcane for blending in petrol by up to Rs 1.47 per litre for 2021-22 marketing year starting December, as part of its target to achieve 20 per cent doping (blending) by 2025. A higher blending of ethanol in petrol will help cut India its oil import bill and also benefit sugar cane farmers as well as sugar mills.

The Cabinet Committee on Economic Affairs (CCEA) gave its approval for fixing a higher price for ethanol derived from different sugarcane-based raw materials under the Ethanol Blended Petrol (EBP) Programme for Ethanol Supply Year (ESY) 2021-22 starting next month.

Giving details, Information and Broadcasting Minister Anurag Thakur said the price of ethanol extracted from sugarcane juice has been increased to Rs 63.45 per litre from the current Rs 62.65 per litre for the supply year beginning December 2021.

The rate for ethanol from C-heavy molasses is increased to Rs 46.66 per litre from Rs 45.69 per litre currently and that of ethanol from B-heavy to Rs 59.08 per litre from Rs 57.61 per litre.

Oil marketing companies Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL), which procure ethanol from sugar mills and distilleries, will also bear the GST and transportation costs on the ethanol procured for doping in petrol.

Thakur said the ethanol blending with petrol has touched 8 per cent in the 2020-21 marketing year (December-November) and is expected to reach 10 per cent next year. India has plans to increase the blending to 20 per cent by 2025. The government has been implementing Ethanol Blended Petrol (EBP) Programme, wherein OMCs sell petrol blended with ethanol up to 10 per cent. The programme has been extended to the whole of India except the Union Territories of Andaman Nicobar and Lakshadweep islands with effect from April 1, 2019, to promote the use of alternative and environment-friendly fuels.

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