Govt revises ethanol price for supply to public sector oil marketing companies

01 Feb 2025

Govt revises ethanol price for supply to public sector oil marketing companies
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The Cabinet Committee on Economic Affairs (CCEA) has approved a revision in the procurement price of ethanol for public sector oil marketing companies (OMCs) for the ethanol supply year (1 November 2024 to 31 October 2025) under the Ethanol Blended Petrol (EBP) programme.

Accordingly, the administered ex-mill price of ethanol derived from C heavy molasses (CHM) has been fixed slightly higher at Rs57.97 per litre against Rs56.58 per litre earlier.

The price revision, which is intended to provide price stability and remunerative prices for ethanol suppliers, will also help in reducing dependency on crude oil imports, savings in foreign exchange and bringing benefits to the environment. 

GST and transportation charges would be payable separately. 

The 3 per cent increase in prices of CHM ethanol will help ensure sufficient availability of ethanol to meet the increased blending target.

Under the Ethanol Blended Petrol (EBP) programme OMCs sell petrol blended with ethanol up to 20 per cent. The aim is to promote the use of alternative and environment friendly fuels while also reducing import dependence for energy requirements. It will also give a boost to the agriculture sector. 

Over the last ten years (as of 31 December 2024), ethanol blending in petrol has resulted in savings of more than Rs1,13,007 crore of foreign exchange and crude oil substitution of about 193 lakh metric tonnes.

The uptake of ethanol for blending by OMCs has increased from 380 million litres in supply year 2013-14 to 7.1 billion litres, marking an average blending of 14.60 per cent in ESY 2023-24.

Government has advanced the target of 20 per cent ethanol blending in petrol to ESY 2025-26 from earlier 2030 and has prepared a ‘Roadmap for ethanol blending in India 2020-25’, which is now in public domain. 

Accordingly, OMCs plan to achieve 18 per cent blending during the ongoing ESY 2024-25. 

Government has taken steps to enhance ethanol distillation capacity to 17.13 billion litres per annum, with long-term offtake agreements for setting up dedicated ethanol plants in ethanol deficit states. Besides, distilleries are encouraged to convert from single feed to multi feed. It is also making available E-100 and E-20 fuel, encouraging the launch of flexi fuel vehicles. 

The EBP programme has helped bring in investments across the country in the form of network of greenfield and brownfield distilleries, storage and logistics facilities apart from employment opportunities.

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