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Cabinet approves hike in ex-mill ethanol prices

New Delhi [India], June 27 : The Cabinet Committee on Economic Affairs (CCEA) on Wednesday has approved to increase the ex-mill price of ethanol used in Public Sector Oil Marketing Companies (OMCs) to Rs 43.70 per litre. The ethanol derived out of C Heavy molasses now cost Rs, 40.85 per litre.

According to the official statement, there will be additional GST and transportation charges. The new price will be applicable from the forthcoming sugar season 2018-19 during the ethanol supply period from 1st December 2018 to 30th November 2019.

Also, the Cabinet has fixed ex-mill price of Rs 47.49 per litre for ethanol derived from B-heavy molasses.

As the price of ethanol is based on estimated Fair and Remunerative Price (FRP) for sugar season 2018-19, it will be modified by Ministry of Petroleum and Natural Gas as per actual FRP declared by the government.

Meanwhile, ethanol availability for Ethanol Blended Petrol (EBP) Programme is expected to increase significantly due to higher price for C heavy molasses based ethanol and enabling procurement of ethanol from B heavy molasses and sugarcane juice for the first time. 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.

The government administered price has increased the procurement of ethanol by Public Sector OMCs from 38 crore litre in year 2013-14 to estimated 140 crore litre in 2017-18.

The sugarcane and sugar production in this sugar season is very high leading to dampening of sugar prices. Consequently, sugarcane farmers' dues have increased due to lower capability of sugar industry to pay the farmers. The government has taken many decisions for reduction of farmer's dues.
As a realisation that ethanol is also one of the components in revenue of sugar mills/distilleries, the government has decided to review the price of ethanol derived out of C heavy molasses.

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