The Cabinet on Wednesday approved 3% hike in ex-mill price for ethanol derived from C heavy molasses at Rs 57.97/litre, up by Rs 1.69, for the ethanol supply year 2024-25 (November-October)
The prices for ethanol produced from B heavy molasses and from sugarcane juice, sugar, sugar syrup were left unchanged at Rs 60.73/litre and Rs 65.61/litre.
Officials said the marginal increase in ethanol prices comes as the government prioritises sourcing from the most cost-effective suppliers. As a result, the prices of B-heavy molasses and sugarcane remain unchanged, ensuring that procurement costs for OMCs stay largely unaffected.
Ethanol prices were last raised in the 2022-23 ethanol supply year. The oil marketing companies (OMCs) also pay Rs 58.5/litre and Rs 71.86/litre to the bio-fuel manufacturers from rice and maize respectively.
Stating that in the interest of sugarcane farmers, as in the past, GST and transportation charges would be separately payable, an official statement stated “increase in prices of ethanol from C heavy molasses by 3% will assure sufficient availability of ethanol to meet the increased blending target.”
The statement said the approval will not only support the government’s ongoing policy to ensure price stability and fair compensation for ethanol suppliers but also reduce reliance on crude oil imports, save foreign exchange, and offer environmental benefits.
A committee has been set up by the petroleum ministry to chalk out a strategy for ethanol blending programme beyond 20% blending with petrol. The committee is likely to submit a report in the next couple of months.
Ethanol blending in petrol by OMCs has increased from 380 million litre in ethanol supply year 2013-14 to 7 billion litre achieving average blending of 14.6% in ESY 2023-24.
The government has advanced the target of 20% ethanol blending in petrol from earlier 2030 to ESY 2025-26.
At present, the ethanol blending in petrol has crossed 19% with production of around 950 crore litres of biofuels and in the next couple of months 20% blending target will be achieved.
According to projections, out of 973 crore litres of ethanol production for reach 20% blending target in the current year, 582 crore litres would be from grain based (maize and rice) bio-fuel makers while the rest would be from bio-products of sugar.
In the last ten years, the ethanol blending programme has resulted in approximate savings of more than Rs.1.13 lakh crore of foreign exchange and crude oil substitution of about 19.3 million tonnes.
Meanwhile, the stock prices of the major sugar companies in BSE rose between 3.22% to 6.46% on Wednesday from the previous closing.
The stock prices of Mawana Sugar rose by 6.46% to Rs 96.63 on Wednesday compared to previous closing on Tuesday. Similarly shares of Bajaj Hindustan, Shree Renuka Sugar and Balampur Chini rose by 3.22%, 5.76% and 3.45% respectively on Wednesday compared to previous closing.
Recently food minister Pralhad Joshi had revised downward the reserve price of rice by 20% to Rs 2250/quintal to be sold to state governments and to supply grain based ethanol manufacturers from Rs 2800/quintal under open market sale scheme from the surplus grain stock of Food Corporation of India.