Ethanol Procurement Price Revision for 2024-25

January 30, 2025

The Cabinet Committee on Economic Affairs in India has approved a revision of the ethanol procurement price for the Ethanol Supply Year 2024-25. This decision aims to support the Ethanol Blended Petrol Programme. The new price is set at Rs. 57.97 per litre. This marks an increase from the previous rate of Rs. 56.58 per litre. The move intends to ensure price stability for ethanol suppliers and reduce reliance on crude oil imports.

Background of Ethanol Blending

The Ethanol Blended Petrol (EBP) Programme allows oil marketing companies to sell petrol blended with ethanol.
The blending target is up to 20% ethanol.
This programme has been implemented nationwide to encourage the use of alternative fuels.

Impact on Foreign Exchange and Crude Oil Imports

The blending of ethanol has led to substantial savings in foreign exchange.
Over the last decade, these savings have exceeded Rs. 1,13,007 crore.
Furthermore, crude oil substitution has reached approximately 193 lakh metric tonnes.
The increase in ethanol blending helps to mitigate the impact of fluctuating oil prices.

Benefits for Sugarcane Farmers

The new pricing structure also benefits sugarcane farmers. The government has ensured that GST and transportation charges will be payable separately. This helps farmers receive a more stable income and promotes the sugarcane industry.

Increased Ethanol Production Capacity

India’s current capacity stands at 1713 crore litres per annum.
The government has also introduced Long Term Off-take Agreements to establish Dedicated Ethanol Plants in regions with lower production.

Future Targets and Roadmap

The government has advanced its target for 20% ethanol blending in petrol from 2030 to the Ethanol Supply Year 2025-26. This change is part of a broader roadmap for ethanol blending in India from 2020 to 2025. The ongoing Ethanol Supply Year 2024-25 aims for an 18% blending rate.

Investment and Employment Opportunities

The EBP Programme has spurred investments in greenfield and brownfield distilleries. It has also led to the development of storage and logistics facilities. These investments create employment opportunities and encourage value sharing among stakeholders.

Environmental Benefits

Using ethanol as a fuel contributes to environmental sustainability. Ethanol is a cleaner alternative to fossil fuels. Its increased use helps reduce greenhouse gas emissions and supports India’s commitment to combat climate change.

« Previous Post