Govt hikes ethanol prices for ethanol blended petrol program

The Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi has approved the Mechanism for procurement of ethanol by public sector oil marketing companies (OMCs) to carry out the ethanol blended petrol (EBP) programme- revision of ethanol price for supply to OMCs. Under the mechanism, the Government of India has increased the ex-mill ethanol prices to Rs.43.70 per litre from prevailing price of Rs.40.85 per litre. Additionally, GST and transportation charges will also be payable.
Now, CCEA has approved the following for the forthcoming sugar season 2018-19 during ethanol supply period from December 1, 2018 to November 30, 2019:
As the price of ethanol is based on estimated Fair & Remunerative Price (FRP) for sugar season 2018-19, it will be modified by Ministry of Petroleum and Natural Gas as per actual FRP declared by the government.
For ethanol supply year 2019-20, ethanol prices will be modified by the Ministry as per normative cost of molasses and sugar derived from FRP of sugarcane.
All distilleries will be able to take benefit of the scheme and large number of them are expected to supply ethanol for the EBP programme. Remunerative price to ethanol suppliers will help in reduction of cane farmers’ arrears, in the process contributing to minimising difficulty of sugarcane farmers.
The ethanol availability for EBP programme is expected to increase significantly due to higher price for C heavy molasses based ethanol and enabling procurement of ethanol from B heavy molasses and sugarcane juice for first time. Increased ethanol blending in petrol has many benefits including reduction in import dependency, support to agricultural sector, more environmental friendly fuel, lesser pollution and additional income to farmers.
The ethanol procured by public sector OMCs has increased from 38 crore litre in ethanol supply year 2013-14 to estimated 140 crore litre in 2017-18.
The sugarcane and sugar production in this sugar season is very high leading to dampening of sugar prices. Consequently, sugarcane farmers’ dues have increased due to lower capability of sugar industry to pay the farmers. The government had announced Rs 7,000 crore bailout package on June 6, 2018 for reduction of farmers’ dues.