The Cabinet Committee on Economic Affairs (CCEA) on Tuesday announced increases in the price of sugarcane-extracted ethanol, used for blending in petrol, in keeping with its stated policy of encouraging ethanol-blended fuel to cut the country’s oil import bill and aiding the sugar industry and farmers.
For the year starting December, price of ethanol derived from C heavy molasses has been increased from Rs 43.46 a litre to Rs 43.75 per litre, and for B heavy molasses to Rs 54.27 per litre from Rs 52.43 earlier. Also, the price of ethanol from sugarcane juice, sugar, sugar syrup route has been fixed at Rs 59.48 per litre.
Oil Minister Dharmendra Pradhan said the higher prices would increase the procurement of ethanol by oil marketing companies to 260 crore litres between December 2019 and November 2020, from 200 crore litres bought in the previous ethanol year. The move, the minister said, would raise the ethanol blending in petrol to about 7 per cent next year from 6 per cent currently.
Ethanol is a by-product of molasses generated on crushing of sugarcane and the higher price is seen to help the sugar mills, which are burdened with high prices of cane fixed by the Centre and state governments. Cane-based ethanol can be produced three different ways — directly from cane juice, from B-grade and C-grade molasses.
Indian Sugar Mills Association (ISMA) director general Abinash Verma said that fixing a single premium rate for ethanol derived from partial or 100 per cent sugar juice was a big positive. —FE