Cabinet approves revised ethanol prices for public sector OMCs

The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, has approved the revision of ethanol procurement prices for Public Sector Oil Marketing Companies (OMCs) for the Ethanol Supply Year (ESY) 2024-25. Starting from November 1, 2024, to October 31, 2025, the administered ex-mill price of ethanol derived from C Heavy Molasses (CHM) has been fixed at Rs. 57.97 per litre, up from Rs. 56.58 per litre.

Under the Ethanol Blended Petrol (EBP) Programme, OMCs sell petrol blended with ethanol up to 20%. Over the past decade, ethanol blending has resulted in savings of over Rs. 1,13,007 crore in foreign exchange and substituted approximately 193 lakh metric tonnes of crude oil.

Ethanol blending has increased from 38 crore litres in ESY 2013-14 to 707 crore litres in ESY 2023-24, achieving an average blending rate of 14.60%. The government has advanced the target of 20% ethanol blending in petrol to ESY 2025-26 and released a "Roadmap for ethanol blending in India 2020-25." OMCs plan to achieve 18% blending during ESY 2024-25.

Recent initiatives include: enhancing ethanol distillation capacity to 1713 crore litres per annum, establishing Dedicated Ethanol Plants (DEPs) in ethanol deficit states, encouraging the conversion of single feed distilleries to multi-feed, and launching flexi fuel vehicles. These steps aim to ease business operations and achieve the objectives of Atmanirbhar Bharat.

The revised prices aim to provide price stability and remunerative rates for ethanol suppliers, reduce dependency on crude oil imports, save foreign exchange, and benefit the environment. GST and transportation charges will be separately payable, and a 3% price increase for CHM ethanol is expected to ensure sufficient availability to meet the increased blending target.

The EBP Programme has led to significant investments in greenfield and brownfield distilleries, storage and logistics facilities, employment opportunities, and value sharing within the country.The government expects all distilleries to benefit from the scheme, leading to foreign exchange savings, crude oil substitution, environmental benefits, and timely payments to cane farmers.