Union Cabinet approves price hike for jaggery-based ethanol

Union Cabinet, chaired by Prime Minister Narendra Modi, has increased the price of ethanol made from jaggery for the current marketing season. Ethanol is produced from molasses, which is used in mixtures of petrol. The government has approved the revision of ethanol procurement price for public sector oil marketing companies (OMCs) for the ethanol supply year (ESY) 2024-25 from November 1, 2024 to October 31, 2025 under the Ethanol Blended Petrol (EBP) Programme.

Accordingly, the administered ex-mill price of ethanol for EBP programme derived from Sea Heavy Molasses (CHM) has been increased from Rs 56.58 per litre to Rs 57.97 per litre.

The government said the price approval will not only facilitate the government to continue its policy in providing price stability and remunerative prices for ethanol suppliers but will also help in reducing dependence on crude oil imports, saving foreign exchange and benefiting the environment. In the interest of sugarcane farmers, as before, GST and transportation charges will be payable separately.

The 3% increase in CHM ethanol prices will ensure adequate availability of ethanol to meet the enhanced blending target. The government is implementing the Ethanol Blended Petrol (EBP) programme, in which oil marketing companies sell petrol blended with ethanol up to 20 per cent.

The programme is being implemented across the country to promote the use of alternative and environment-friendly fuels. The objective of this intervention is to reduce import dependency for energy requirements and boost the agriculture sector. During the last ten years, blending of ethanol in petrol by Public Sector Oil Marketing Companies (OMCs) has resulted in savings of foreign exchange of more than Rs.