The ex-mill price of ethanol made from C heavy molasses was agreed by the Cabinet on Wednesday to increase by 3% to Rs 57.97/liter, or Rs 1.69 more, for the 2024–2025 ethanol supply year (November–October). Prices of Rs 60.73/liter and Rs 65.61/liter for ethanol made from B heavy molasses and sugarcane juice, sugar, and sugar syrup remained the same.
The slight increase in ethanol costs, according to officials, is a result of the government giving priority to procuring from the most economical suppliers. This ensures that procurement expenses for OMCs are generally unaffected, as the prices of sugarcane and B-heavy molasses remain the same.
The most recent increase in ethanol prices occurred during the 2022–2023 ethanol supply year. Additionally, the oil marketing corporations compensate the producers of biofuel from rice and maize Rs 58.5/liter and Rs 71.86/liter, respectively.
According to the statement, the clearance will lessen dependency on imports of crude oil, save foreign exchange, and benefit the environment in addition to supporting the government’s continuous strategy to guarantee price stability and equitable recompense for ethanol suppliers.
The petroleum ministry has established a group to develop a plan for the ethanol blending program that goes beyond a 20% blend with gasoline. In the upcoming months, the committee is probably going to submit a report.
The amount of ethanol that OMCs blend into gasoline has grown from 380 million liters in the 2013–14 ethanol supply year to 7 billion liters, with an average blending of 14.6% in the 2023–24 ESY. The government’s 2030 goal of 20% ethanol blend in gasoline has been moved to ESY 2025–2026.
With the production of almost 950 crore liters of biofuels, the ethanol blending in gasoline has currently surpassed 19%, and the 20% blending objective will be reached in the coming months.
Forecasts indicate that 582 crore liters of the 973 crore liters of ethanol produced to meet the 20% blending objective this year will come from grain-based (rice and maize) bio-fuel producers, with the remaining amount coming from sugar bio-products.
In the meantime, Wednesday’s closing saw a 3.22% to 6.46% increase in the stock prices of the major sugar businesses listed on the BSE.
