The government on Thursday hiked the price of ethanol extracted from sugarcane for doping in petrol by up to Rs 3.34 per litre as it looked to ramp up the programme that has benefited farmers and also helped cut down oil import bill.
The Cabinet Committee on Economic Affairs (CCEA) headed by Prime Minister Narendra Modi raised the price of ethanol extracted from sugarcane juice to Rs 62.65 per litre from current Rs 59.48 per litre for the supply year beginning December 2020.
The rate for ethanol from C-heavy molasses has been increased from Rs 43.75 per litre to Rs 45.69 per litre and that of ethanol from B-heavy to Rs 57.61 per litre from Rs 54.27 per litre, I&B Minister Prakash Javadekar told reporters here.
India, which is 85 per cent dependent on imports to meet its oil needs, allows doping of up to 10 per cent ethanol in petrol with a view to cutting oil import and vehicular emissions as also offer a remunerative source for sugarcane farmers to sell their produce.
The steady rise in the price of ethanol paid by oil marketing companies has led to ethanol procurement jump to 195 crore litre in 2019-20 (December 2019 to November 2020) from 38 crore litre in 2013-14.
Oil marketing companies Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) will bear GST and transportation cost on the ethanol procured for doping in petrol, he said.
“Ethanol is very environment-friendly fuel with zero-emission,” he said.
Previously there was only one rate of ethanol but the government has fixed different price for different sources of ethanol.
At present ethanol production is allowed from C-heavy molasses, B-heavy molasses, sugarcane juice or syrup or direct sugar. The ethanol procurement season by oil marketing companies (OMCs) will run from December 1, 2020, to November 30, 2021.
For the 2019-20 season that will end next month, sugar mills have so far offered around 195 crore litres of ethanol of which 142 crore litres (around 73 per cent) has already been supplied to oil marketing companies (OMCs).
The blending ratio is half of the 10 per cent mandated by the government.PTI