Ethanol price hike on the cards to boost production

13 Aug 2024 , 02:03 PM

The government is considering raising ethanol pricing for the season beginning in November 2024, as well as pressing for feedstock diversification, in order to meet the 20% blending objective by 2025-26, according to news reports.

A group chaired by a joint secretary from the petroleum ministry has already had one round of discussions about the plan. ET report said that the ethanol price revision will be based on the fair and remunerative price of sugarcane.

“The price revision is being considered as a priority to incentivise production and meet our blending goals,” said a source quoted by ET.

Last week, Cooperation Minister Amit Shah called for a multifaceted approach to biofuel manufacture and pledged that India would meet its 20% ethanol blending objective by 2025-26, ahead of the initial 2030 date.

Since the 2022-23 season (November-October), government-fixed ethanol prices have stayed steady. Currently, ethanol produced from cane juice costs Rs 65.61 per litre, whereas ethanol produced from B-Heavy and C-Heavy molasses costs Rs 60.73 and Rs 56.28 per litre, respectively.

According to the report, the government sees the ethanol blending scheme as critical to reaching its green energy obligations while also boosting the financial health of sugar mills.

According to government data, ethanol blending in India has increased to 13.3 percent by July of the current season, up from 12.6% in the 2022–23 season.

The country’s total ethanol production capacity is presently 1,589 crore litres, with oil marketing corporations purchasing 505 crore litres for blending during the 2023-24 season.

According to reports, the committee is primarily looking into revising the costs of sugarcane-based ethanol.

The sugar sector has demanding ethanol price increases, a raise in the minimum selling price of sugar, and permission for sugar exports.

However, the government prioritises ethanol production and blending targets.

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