Government Approves Ethanol Price Revision for 2024-25
The Cabinet Committee on Economic Affairs (CCEA), led by Prime Minister Narendra Modi, has made a significant decision regarding ethanol procurement prices. This approval is crucial for the Ethanol Supply Year (ESY) 2024-25, which runs from November 1, 2024, to October 31, 2025. The revised price for ethanol derived from C Heavy Molasses (CHM) has been set at Rs. 57.97 per litre, an increase from the previous Rs. 56.58 per litre. This move is part of the government’s ongoing efforts to promote the Ethanol Blended Petrol (EBP) Programme, which aims to reduce reliance on crude oil imports and support the agricultural sector.
Benefits of the Price Revision
The recent approval of the ethanol price revision is expected to yield multiple benefits. First and foremost, it will provide price stability and ensure that ethanol suppliers receive fair compensation. This is particularly important for sugarcane farmers, as the government will continue to pay Goods and Services Tax (GST) and transportation charges separately. The increase in the ethanol price by approximately 3% will help guarantee a sufficient supply of ethanol to meet the growing blending targets.
Moreover, this initiative aligns with the government’s broader goals of reducing foreign exchange dependency and promoting environmentally friendly fuels. By increasing the use of ethanol in petrol, the government aims to decrease the country’s reliance on imported crude oil. This shift not only supports local farmers but also contributes to environmental sustainability by reducing carbon emissions associated with fossil fuels.
The Ethanol Blended Petrol Programme
The Ethanol Blended Petrol (EBP) Programme has been a cornerstone of India’s energy policy. Under this initiative, Public Sector Oil Marketing Companies (OMCs) blend petrol with up to 20% ethanol. This program is implemented nationwide to encourage the use of alternative fuels and enhance energy security. Over the past decade, the EBP Programme has led to significant savings in foreign exchange, amounting to over Rs. 1,13,007 crore, while substituting approximately 193 lakh metric tonnes of crude oil.
Ethanol blending has seen remarkable growth, rising from 38 crore litres in the Ethanol Supply Year 2013-14 to 707 crore litres in the current year. This achievement reflects an average blending rate of 14.60% for the Ethanol Supply Year 2023-24. The government has also accelerated its target for achieving 20% ethanol blending in petrol from 2030 to the Ethanol Supply Year 2025-26. This ambitious goal underscores the government’s commitment to enhancing energy independence and supporting the agricultural sector.
Future Prospects and Investments
The government’s proactive approach under the EBP Programme has spurred investments across the country. New distilleries, both greenfield and brownfield, have been established, along with storage and logistics facilities. This growth has created numerous employment opportunities and fostered collaboration among various stakeholders in the ethanol supply chain.
To further support this initiative, OMCs are working to enhance ethanol distillation capacity to 1713 crore litres per annum. They are also implementing Long Term Off-take Agreements (LTOAs) to establish Dedicated Ethanol Plants (DEPs) in regions with ethanol deficits. Additionally, the government is encouraging the conversion of single-feed distilleries to multi-feed operations and promoting the availability of E-100 and E-20 fuels. These measures not only facilitate business operations but also align with the objectives of Atmanirbhar Bharat, or self-reliant India.
The recent revision of ethanol prices is a strategic move that promises to benefit farmers, reduce foreign exchange dependency, and promote environmental sustainability. The government’s commitment to the EBP Programme and its ambitious targets for ethanol blending signal a positive trajectory for India’s energy landscape.
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