Synopsis
The Union Cabinet has approved a price hike for ethanol sourced from C Heavy Molasses to Rs 57.97 per litre as part of India's Ethanol Blended Petrol initiative for 2024-25. This move aims to stabilize prices for suppliers, reduce crude oil imports, and support environmental sustainability.Key Takeaways
- Price Increase: Ethanol price rises to Rs 57.97 per litre.
- Government Support: Aims to stabilize prices for ethanol suppliers.
- Environmental Impact: Reduces dependency on crude oil imports.
- Blending Target: 18% blending aimed for ESY 2024-25.
- Investment Growth: Encourages new distilleries and job creation.
New Delhi, Jan 29 (NationPress) The Union Cabinet has given its nod on Wednesday for a rise in the ex-mill price of ethanol sourced from C Heavy Molasses (CHM), now set at Rs 57.97 per litre, up from Rs 56.58 per litre previously, as part of the Ethanol Blended Petrol initiative for the supply year 2024-25.
The Cabinet Committee on Economic Affairs (CCEA), led by Prime Minister Narendra Modi, stated that this decision will not only assist in maintaining the government's policy of ensuring price stability and fair compensation for ethanol producers but will also diminish reliance on crude oil imports, promote foreign exchange savings, and yield environmental advantages.
To benefit sugarcane farmers, GST and transportation costs will continue to be paid separately.
The 3% increase in the price of CHM ethanol is expected to guarantee adequate ethanol availability to fulfill the heightened blending targets, as per an official announcement following the cabinet meeting.
The Ethanol Supply Year (ESY) 2024-25 runs from November 1, 2024 to October 31, 2025 under the government's Ethanol Blended Petrol (EBP) Program.
The government has been actively executing the Ethanol Blended Petrol (EBP) Program, wherein Oil Marketing Companies (OMCs) offer petrol blended with up to 20% ethanol. This initiative is being rolled out nationwide to encourage the adoption of alternative and environmentally sustainable fuels. Furthermore, it aims to lessen import dependencies for energy needs and bolster the agricultural sector.
Over the past decade (as of Dec 31, 2024), the ethanol blending in petrol by public sector OMCs has achieved estimated savings exceeding Rs 1,13,007 crore in foreign exchange and replaced around 193 lakh metric tonnes of crude oil.
The volume of ethanol blended by public sector OMCs has surged from 38 crore litres in the Ethanol Supply Year 2013-14 to 707 crore litres, resulting in an average blending rate of 14.60% in the ESY 2023-24, as stated.
The government has moved the target for 20% ethanol blending in petrol from early 2030 to ESY 2025-26, and has released a Roadmap for Ethanol Blending in India 2020-25 for public access.
To support this objective, OMCs aim for 18% blending in the ongoing ESY 2024-25. Recent initiatives also encompass enhancing ethanol distillation capacity to 1713 crore litres annually, establishing Long Term Off-take Agreements (LTOAs) for setting up Dedicated Ethanol Plants (DEPs) in ethanol-scarce states, promoting the transition from single feed to multi-feed distilleries, ensuring availability of E-100 and E-20 fuels, and launching flexi fuel vehicles. All these measures contribute to improving the business environment and fulfilling the goals of Atmanirbhar Bharat, as noted.
The visibility provided by the government under the EBP Program has spurred investments nationwide, resulting in a network of both greenfield and brownfield distilleries, storage, and logistics facilities, along with creating job opportunities and facilitating value sharing among various stakeholders within the country.
All distilleries will have the opportunity to benefit from this scheme, and a significant number are anticipated to supply ethanol for the EBP program. This will enhance quantifiable foreign exchange savings, crude oil substitution, environmental improvements, and prompt payments to cane farmers, the statement concluded.
