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Cabinet Approves Revised Ethanol Procurement Price for ESY 2024-25, aimed to provide production boost


In a significant move to boost the Ethanol Blended Petrol (EBP) Programme, the Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, has approved the revision of ethanol procurement prices for Public Sector Oil Marketing Companies (OMCs) for the Ethanol Supply Year (ESY) 2024-25.
This period will span from November 1, 2024, to October 31, 2025. Under the revised pricing mechanism, the administered ex-mill price of ethanol derived from C Heavy Molasses (CHM) has been increased to Rs. 57.97 per litre from the previous Rs. 56.58 per litre.
The revision aims to provide price stability and ensure remunerative prices for ethanol suppliers, thereby encouraging sustained ethanol production. In addition, the government will continue to cover Goods and Services Tax (GST) and transportation charges separately, ensuring better returns for sugarcane farmers.
The decision is expected to have far-reaching benefits, including reducing dependency on crude oil imports, saving foreign exchange, and promoting environmental sustainability. The government has been actively implementing the EBP Programme, under which OMCs blend ethanol with petrol up to 20%, a move that supports alternative and eco-friendly fuel usage while enhancing energy security and benefiting the agricultural sector.
Over the past decade, ethanol blending has significantly increased, leading to substantial savings. As of December 31, 2024, the EBP Programme has saved more than Rs. 1,13,007 crore in foreign exchange and substituted approximately 193 lakh metric tonnes of crude oil.
Ethanol blending levels have grown from 38 crore litres in ESY 2013-14 to 707 crore litres in ESY 2023-24, achieving an average blending rate of 14.60%. With the government advancing the 20% ethanol blending target from 2030 to ESY 2025-26, efforts are underway to achieve an 18% blending rate in ESY 2024-25.
To support this goal, various measures have been implemented, including increasing ethanol distillation capacity to 1,713 crore litres per annum, facilitating Long-Term Off-Take Agreements (LTOAs) for Dedicated Ethanol Plants (DEPs) in ethanol-deficient states, encouraging multi-feed distilleries, and promoting the availability of E-100 and E-20 fuel.
Additionally, the introduction of flexi-fuel vehicles is expected to accelerate ethanol adoption. The EBP Programme has provided significant investment opportunities, leading to the establishment of greenfield and brownfield distilleries, enhanced storage and logistics infrastructure, and increased employment generation.
The initiative supports India's vision of achieving self-reliance (Atmanirbhar Bharat) by fostering domestic ethanol production and ensuring timely payments to sugarcane farmers. With these progressive steps, the government remains committed to enhancing ethanol production, optimizing resource utilization, and reinforcing India's energy security through sustainable and environment-friendly fuel alternatives.
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