Government Hikes Ethanol Prices To Alleviate Sugarcane Farmers Stress

Oil retailers sell petrol blended with ethanol up to 10% since 2014 under the EBP programme.

“The current blending of 10% of ethanol helps India save in Rs 40,000 crore of fuel imports,” Hardeep Singh Puri, minister of petroleum and natural gas, told reporters after the cabinet decision. “The plan is to increase the blending to 20% by 2025 under the EBP programme.”

“We can achieve the 20% ethanol blending target even before the targeted date, provided the volatility in crude price due to Ukraine war normalises in the due course,” Puri said.

The blending programme has been extended to whole of India, Andaman Nicobar and Lakshadweep islands, with effect from April 1, 2019. And the government has widened the scope to include other agricultural items such as rice husk, maize, broken rice and wheat to increase ethanol production, said Puri.

The country will need to increase its ethanol output to 1,000 crore litres a year from the current 450 crore litre to meet the 20% blending target.

“For the current ethanol supply year–Dec. 1, 2022 through Nov. 30, 2023– we have tendered for 540 crore litre of ethanol,” Puri said.

Ethanol procurement by state-run oil marketing companies has increased from 38 crore litres in 2013-14 to over 452 crore litre in the ongoing supply year 2021-22. 

The 10% blending target was achieved by June 2022, ahead of the November 2022 deadline.

The government has also provided for long term off-take agreements to encourage setting up of 431 crore litres per annum capacity of dedicated plants in ethanol-deficit states by private players, which is expected to bring investments of Rs 25,000-30,000 crore in the coming years, the statement said.

The government is also working on increasing multimodal transportation of ethanol and ethanol-blended petrol by railways and pipelines, the release said.