The Cabinet Committee on Economic Affairs (CCEA) has approved a revision in the ethanol procurement price for Public Sector oil marketing companies (OMCs) under the ethanol blended petrol (EBP) Programme.
The revised pricing applies to the Ethanol Supply Year (ESY) 2024-25, running from November 1, 2024, to October 31, 2025.
New Pricing for Ethanol Supply
The government has set the administered ex-mill price of ethanol derived from C Heavy Molasses (CHM) at ₹57.97 per litre, up from ₹56.58 per litre.
The three percent increase ensures sufficient ethanol availability to meet the rising blending targets. Additionally, the government will continue to cover GST and transportation charges separately, benefiting sugarcane farmers.
Boost to Energy Security and Environmental Benefits
The price revision supports the government’s efforts to provide stability and fair pricing for ethanol suppliers.
It also reduces dependency on crude oil imports, leading to significant foreign exchange savings and environmental advantages.
Progress in Ethanol Blending and Energy Goals
Under the Ethanol Blended Petrol (EBP) Programme, OMCs blend ethanol with petrol to promote alternative, eco-friendly fuels.
Over the last decade (as of December 31, 2024), ethanol blending has helped India save over ₹1,13,007 crore in foreign exchange and substitute 193 lakh metric tons of crude oil.
Ethanol procurement has surged from 38 crore litres in ESY 2013-14 to 707 crore litres in
ESY 2023-24, achieving an average blending of 14.60%.
The government aims to achieve 18% blending in ESY 2024-25 and has advanced the 20% blending target from 2030 to ESY 2025-26.
Strategic Measures to Promote Ethanol Production
To achieve these ambitious targets, the government has implemented several initiatives, including:
- Increasing ethanol distillation capacity to 1,713 crore litres per annum.
- Introducing Long Term Off-take Agreements (LTOAs) to establish Dedicated Ethanol Plants (DEPs) in ethanol-deficient states.
- Encouraging conversion of single-feed distilleries to multi-feed units.
- Promoting E-100 and E-20 fuel availability.
- Launching flexi-fuel vehicles to expand ethanol consumption.
- Economic Growth and Employment Opportunities
The EBP Programme has stimulated investments across India, leading to the development of greenfield and brownfield distilleries, storage, and logistics facilities.
The developments have created jobs, supported the agricultural sector, and ensured timely payments to sugarcane farmers.
As reported by pib.gov.in, by strengthening domestic ethanol production, India moves closer to achieving energy self-reliance (Atmanirbhar Bharat) while generating substantial foreign exchange savings, crude oil substitution, and environmental improvements.
