Ethanol Purchase Price May Rise By Rs 2 Per Litre Next Year

The Central Government may increase the purchase price of ethanol across all categories by up to Rs 2 per litre for the 2022-23 season (December-November).

An official from the petroleum ministry said, “Based on internal discussions, it was understood that the purchase price of ethanol could be hiked by up to Rs 2. That is the upper limit with which we are comfortable.”

Details have been sent to the minister and the final decision will rest with him and the Cabinet, he added.

Unlike other countries, in India, ethanol procurement price is linked to the fair and remunerative price (FRP) of sugarcane. This has been raised from Rs 290 per quintal in 2021-22 (October to September) to Rs 305 for 2022-23 (for a basic recovery of 10.25 per cent).

During the current ethanol supply year, the government has increased ethanol prices in all three categories from different sources by 1.27 to 2.55 per cent.

Ethanol’s purchase rate produced from C-heavy molasses was increased to Rs 46.66 per litre from Rs 45.69. And, that of B-heavy ethanol, was Rs 59.08 per litre from Rs 57.61 per litre.

A senior industry official said, “Though the industry expects a higher procurement price for ethanol next year, but given that it is linked to FRP, the increase could be moderate,”. He also said that a final call on this could be taken in the next few months.

India has plans to increase the blending to 20 per cent by the year 2025. The centre thinks that a higher blending of ethanol in petrol will help India cut its oil import bill. Also, it will beneficial for sugarcane farmers and mills.