The government is likely to approve an increase domestic prices of ethanol as well as the minimum sale price (MSP) for sugar as has been demanded by the industry, food minister Pralhad Joshi on Thursday said.
Joshi said the government is considering proposals to increase the ethanol price for the 2024-25 ethanol supply year, along with the MSP of sugar by the mills. The current MSP of sugar has remained at Rs 31/kg since February 2019.
“As far as my information goes, the petroleum ministry is considering hiking prices of ethanol, as our ministry is nodal ministry, we are in touch with petroleum ministry who are seized of the matter,” Joshi said at the sideline of an event.
The move is aimed at bolstering the ethanol blending program, which targets 20% ethanol blending in petrol by 2025-26.
According to an official note, the blending percentage has touched 15.83% in July, 2024 and cumulative blending percentage has crossed 13.6% in the ongoing Ethanol Supply Year (ESY) 2023-24 (November-October).
Joshi while speaking at the India Sugar and Bio-Energy Conference 2024.stated the food ministry has written to Niti Aayog to prepare a road map for achieving ethanol blending target to 25%.
Ethanol prices, fixed by the government, have not been hiked since the 2022-23 ethanol supply year. Currently, ethanol produced from cane juice is priced at Rs 65.61/litre, while rates for ethanol from B-Heavy and C-Heavy molasses stood at Rs 60.73/litre and Rs 56.28/litre, respectively.
Under the ethanol blended petrol (EBP) Programme wherein public sector oil marketing companies sell petrol blended with ethanol. Under EBP Programme, the blending of ethanol with petrol increased from 38 crore litres in ESY 2013-14 to more than 1623 crore litres in ESY 2023-24 with corresponding increase in blending percentage from 1.3% to 13.6%.
The government sees the ethanol blending program as a key to meeting its green energy commitments and improving the financial health of sugar mills.
On increasing MSP of sugar, said a committee of secretaries are deliberating on it and it’s under consideration.
“With the introduction of MSP, the area of pending cane dues of farmers has become a thing of the past. Cane dues pendency is at an all-time low in India with around 99% cane dues out of Rs. 1.14 lakh crores have been paid to farmers with support of the sugar industry,” he said.
Indian Sugar Mills and Bio-Energy Manufacturers Association (ISMA) had earlier urged the government to enhance MSP of sugar by the millers with the corresponding increase in fair and remunerative price (FRP) prices of sugarcane pad to farmers.
“The MSP was fixed when FRP was Rs 275/quintal and we have requested the government to revise it to Rs 3900/quintal because of corresponding increase in FRP over the years,” Deepak Ballani, Director General, ISMA, had said.
On lifting the ban on sugar exports in the 2024-25 season, Joshi said a decision will be taken after looking at availability, production prospects and also production which is expected to be good following favourable rainfall. “We will take a call after getting output figure of industry as well sa food ministry,”