FCC

Govt Considers Ethanol Price Increase for 2024-25 to Boost Production

2024-08-14

The government is considering a proposal to increase ethanol prices for the season beginning in November 2024, while also advocating for the diversification of feedstocks to meet the 20 per cent blending target by 2025-26, sources indicated. A committee led by a joint secretary from the petroleum ministry has already conducted an initial round of discussions on the proposal. They noted that the adjustment of ethanol prices will be determined based on the fair and remunerative price of sugarcane.

One source, who requested anonymity, mentioned that the price revision is being prioritized to encourage production and achieve the blending goals.

Last week, Cooperation Minister Amit Shah emphasised the need for a multi-dimensional approach to biofuel manufacturing and assured that India would meet its 20 per cent ethanol blending target by 2025-26, ahead of the original 2030 deadline. Ethanol prices, set by the government, have remained unchanged since the 2022-23 season (November-October). At present, ethanol produced from cane juice is priced at Rs 65.61 per litre, while ethanol from B-Heavy and C-Heavy molasses is priced at Rs 60.73 and Rs 56.28 per litre, respectively.

According to the sources, the government views the ethanol blending program as crucial for fulfilling its green energy commitments and enhancing the financial stability of sugar mills.

Official data reveals that ethanol blending in India reached 13.3 per cent by July of the current season, an increase from 12.6 per cent during the 2022-23 season.