The Union Cabinet on 3 September 2019 approved a higher procurement price for ethanol purchased by oil marketing companies for the ethanol blended petrol (EBP) programme, which will come into effect from December 1 for a period of one year.
According to the new decision, the price of ethanol from C-heavy molasses will be increased from ₹43.46 per litre to ₹43.75 per litre. The price of ethanol from B-heavy molasses will be increased from ₹52.43 per litre to ₹54.27 per litre.
- The price of ethanol from sugarcane juice, sugar, and sugar syrup has been set at ₹59.48 per litre. The oil marketing companies will also pay the Goods and Services Tax and transportation tax associated with the ethanol supply — a provision that existed in the previous plan as well.
- OMCs have been advised to fix realistic transportation charges so that long distance transportation of ethanol is not disincentivised, the government said.
- OMCs are advised to continue according priority of ethanol from 1) sugarcane juice/sugar/sugar syrup, 2) B-heavy molasses 3) C-heavy molasses and 4) damaged food grains/other sources, in that order.
- Ethanol availability for EBP programme is expected to increase significantly due to higher price being offered for procurement of ethanol from all the sugarcane based routes, subsuming ‘partial sugarcane juice route’ and ‘100% sugarcane juice route’ under ‘sugarcane juice route’ and for the first time allowing sugar and sugar syrup for ethanol production.
- Increased ethanol blending in petrol has many benefits including reduction in import dependency, support to agricultural sector, more environmental friendly fuel, lesser pollution and additional income to farmers.