Central government has taken a significant step towards enhancing energy security and environmental sustainability by approving a revision in ethanol procurement prices under the Ethanol Blended Petrol (EBP) Programme.
The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, has approved new ethanol prices for Public Sector Oil Marketing Companies (OMCs) for the Ethanol Supply Year 2024-25. The ex-mill price of ethanol derived from C Heavy Molasses has been increased to Rs 57.97 per litre from Rs 56.58 per litre.
This move aims to provide price stability for ethanol suppliers while reducing dependency on crude oil imports, saving valuable foreign exchange, and promoting eco-friendly fuel alternatives. The government has ensured that sugarcane farmers benefit from this initiative by keeping GST and transportation charges separately payable. With a 3% increase in CHM ethanol prices, the initiative is expected to support the ethanol supply needed to meet the country’s rising blending targets.
India's EBP Programme allows up to 20% ethanol blending in petrol, promoting eco-friendly fuel alternatives and reducing the country’s reliance on crude oil imports. Over the past decade, ethanol blending has helped save Rs 1,13,007 crore in foreign exchange and substitute about 193 lakh metric tonnes of crude oil.
Ethanol blending by Public Sector Oil Marketing Companies (OMCs has surged from 38 crore litres in 2013-14 to 707 crore litres in 2023-24, achieving an average blending of 14.60%. To accelerate progress, the government has advanced its target of achieving 20% ethanol blending from 2030 to ESY 2025-26. The roadmap for ethanol blending in India (2020-25) has been laid out, with a goal of 18% blending in ESY 2024-25.
To support this transition, measures such as increasing ethanol distillation capacity, , Long-Term Off-Take Agreements (LTOAs) for setting up ethanol plants, and launching flex-fuel vehicles have been introduced.
The government’s continued efforts under the EBP Programme have attracted significant investments, created employment opportunities, and ensured timely payments to sugarcane farmers. These initiatives contribute to reducing foreign exchange outflows, substituting crude oil, ensuring early payments to sugarcane farmers, and supporting India's vision of Atmanirbhar Bharat.
