The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, has approved an increase in the ethanol procurement price for Public Sector Oil Marketing Companies (OMCs) under the Ethanol Blended Petrol (EBP) programme for the Ethanol Supply Year (ESY) 2024-25. The approval will support the government’s policy of ensuring price stability and fair returns for ethanol suppliers while also reducing dependence on crude oil imports, saving foreign exchange, and benefiting the environment.
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The Union Cabinet approved a revision in ethanol procurement prices for public sector oil marketing companies (OMCs) under the Ethanol Blended Petrol Programme for the 2024–25 supply year (Nov. 1, 2024 – Oct. 31, 2025). The ex-mill price of ethanol from C-heavy molasses has been increased to ₹57.97 per litre from ₹56.58 per litre.
Union minister Ashwini Vaishnaw, during a press briefing, highlighted that this move will ensure price stability for ethanol suppliers, reduce crude oil imports, save foreign exchange, and will benefit the environment. Additionally, GST and transportation costs will be paid separately in the interest of sugarcane farmers.
He said “Increase in prices of CHM Ethanol by 3% will assure sufficient availability of ethanol to meet the increased blending target.”
India’s ethanol blending programme promotes alternative and eco-friendly fuels, aiming to reduce import dependence and support the agriculture sector. Over the past decade, public-sector OMCs have saved ₹1.13 lakh crore in foreign exchange and replaced 193 lakh metric tonnes of crude oil through ethanol blending. Ethanol procurement has surged from 38 crore litres in 2013-14 to 707 crore litres in 2023-24, achieving an average blending rate of 14.60%.
The government has advanced the target of achieving 20% ethanol blending in petrol from 2030 to the Ethanol Supply Year (ESY) 2025-26 and has released the “Roadmap for Ethanol Blending in India 2020-25” for public access, (OMCs plan to achieve 18% blending during the ongoing ESY 2024-25). Measures to support this goal include increasing ethanol distillation capacity to 1,713 crore litres annually, setting up dedicated ethanol plants in deficit states, converting single-feed distilleries to multi-feed, and promoting E-100 and E-20 fuels. Additionally, flexible-fuel vehicles have been introduced to encourage ethanol adoption.
The government’s support under the EBP Programme has driven nationwide investments, leading to the establishment of greenfield and brownfield distilleries, as well as the expansion of storage and logistics infrastructure. This has also created employment opportunities and facilitated value-sharing among various stakeholders. With all distilleries eligible to benefit from the scheme, a significant number are expected to supply ethanol for the EBP Programme, contributing to foreign exchange savings, crude oil substitution, environmental benefits, and timely payments to sugarcane farmers.
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