New Delhi: The Cabinet Committee on Economic Affairs (CCEA) today approved the adjustment of the ethanol procurement price for Public Sector Oil Marketing Companies (OMCs) for the Ethanol Supply Year (ESY) 2024-25, which will commence on November 1, 2024, and conclude on October 31, 2025, as part of the Government of India’s Ethanol Blended Petrol (EBP) Programme. Consequently, the established ex-mill price of ethanol sourced from C Heavy Molasses (CHM) for the EBP Programme for the ESY 2024-25 has been set at Rs.57.97 per litre, an increase from the previous rate of Rs.56.58 per litre.
The approval will not only support the Government’s ongoing policy aimed at ensuring price stability and fair compensation for ethanol suppliers, but it will also contribute to a decrease in reliance on crude oil imports, generate foreign exchange savings, and provide environmental benefits, a Cabinet note stated. It informed that in consideration of sugarcane farmers, as has been the practice previously, Goods and Services Tax (GST) and transportation costs will be billed separately. A 3% increase in the price of CHM Ethanol will guarantee an adequate supply of ethanol to fulfill the heightened blending targets.
The Government has been executing the Ethanol Blended Petrol (EBP) Programme, which allows Oil Marketing Companies (OMCs) to sell petrol blended with up to 20% ethanol. This initiative is being rolled out nationwide to encourage the adoption of alternative and environmentally friendly fuels. Additionally, it aims to lessen energy import dependence and enhance the agricultural sector. Over the past decade (as of December 31, 2024), the ethanol blending in petrol by Public Sector OMCs has led to estimated foreign exchange savings exceeding Rs. 1,13,007 crore and a crude oil substitution of approximately 193 lakh metric tonnes.
The blending by Public Sector Oil Marketing Companies (OMCs) has risen significantly from 38 crore litres in the Ethanol Supply Year 2013-14 (ESY, defined as the period from November 1 of one year to October 31 of the following year) to 707 crore litres, resulting in an average blending rate of 14.60% for ESY 2023-24.
In a significant policy shift, the government has brought forward the target for 20% ethanol blending in petrol from 2030 to ESY 2025-26. Additionally, a “Roadmap for Ethanol Blending in India 2020-25” has been made publicly available.
In line with this initiative, OMCs aim to achieve an 18% blending rate during the current ESY 2024-25.
Recent supportive measures include increasing ethanol distillation capacity to 1713 crore liters per annum, establishing Long Term Off-take Agreements (LTOAs) for Dedicated Ethanol Plants (DEPs) in states facing ethanol shortages, promoting the conversion of single-feed distilleries to multi-feed operations, and the introduction of E-100 and E-20 fuels, along with the launch of flexi-fuel vehicles. These initiatives contribute to enhancing the ease of doing business and furthering the objectives of Atmanirbhar Bharat.
The CCEA noted that due to the visibility provided by the Government under the EBP Programme, investments have happened across the country in the form of a network of greenfield and brownfield distilleries, storage and logistics facilities apart from employment opportunities and sharing of value within the country among various stakeholders. All distilleries will be able to take benefit of the scheme and a large number of them are expected to supply ethanol for the EBP programme. This will help in quantifiable forex savings, crude oil substitution, environmental benefits and early payment to cane farmers, the CCEA stated.
– global bihari bureau
