Cabinet Hikes Ethanol Prices, To Benefit Sugarcane Farmers, Sugar Stocks

On Thursday, the Cabinet Committee on Economic Affairs approved fixing higher ethanol price derived from different sugarcane-based raw materials under the Ethanol Blended Petrol (EBP) Programme for the forthcoming sugar season 2020-21 during Ethanol Supply Year (ESY) 2020-21 from 1 December 2020 to 30 November 2021. The move will help farmers and sugar manufacturers.

The Cabinet, in its statement, said that the price of ethanol from C heavy molasses route to be increased from Rs 43.75 per litre to Rs 45.69 per litre, price of ethanol from B heavy molasses route be raised from Rs 54.27 per litre to Rs 57.61 per litre and price of ethanol from sugarcane juice/sugar/sugar syrup route be increased from Rs 59.48 per litre to Rs 62.65 per litre.

The various grades of ethanol are supplied to oil marketing companies (OMCs) to blend cleaner fuel with conventional petroleum products.

The Modi government has the target to ensure that around 10 percent of the total petroleum consumed in the country is blended with ethanol by 2022 and thereafter the target could be scaled up to 20 percent blending by 2030.

The various grades of ethanol can be extracted from sources other than sugarcane, such as broken rice and maize as feedstock.

"Additionally, GST and transportation charges will also be payable. OMCs have been advised to fix realistic transportation charges so that long-distance transportation of ethanol is not disincentivised," the Cabinet's statement said on Thursday.

"In order to offer fair opportunity to the localized industry within the State and reduce crisscross movement of ethanol, Oil Marketing Companies (OMCs) shall decide the criteria for priority of ethanol from various sources taking in account various factors like cost of transportation, availability, etc. This priority will limit to the excisable boundaries of the State / UT for production in that State / UT. Same order of preference will be given thereafter for import of ethanol from other States wherever required," it added.