The prices of ethanol made from damaged or broken rice and maize have been increased by Rs 3.71/litre with immediate effect to help distilleries continue production without any disruption.
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The government has decided to raise the prices of ethanol purchased by oil marketing companies (OMCs) for the second time in 15 days. The prices of ethanol made from damaged or broken rice and maize have been increased by Rs 3.71/litre with immediate effect to help distilleries continue production without any disruption.
With this upward revision in prices, as an additional incentive, ethanol prices currently stand at Rs 64/litre (from damaged rice) and Rs 66.07/litre (from maize).
According to industry sources, of the 21.25 crore litres contracted by OMCs in the current season to buy from grain-based plants and to be produced from damaged rice, distilleries have supplied only 9.52 crore litres. The OMCs, as of July 31 had achieved 11.77% blending since the ethanol season started in December 2022. The season will end by October 31.
The government has shortened the current ethanol season to 11 months. From the 2023-24 season onwards, the ethanol season will run from November to October.
Earlier, many distilleries had stopped operation in the July month when the Food Corporation of India (FCI) upheld the supply of subsidized rice (from mid-July, FCI has stopped supplying Rs 20/kg rice being supplied to produce ethanol). Any such event of disruption in production during August-October could cause a deceleration in blending rate from the current level. The industry had earlier informed the government and also demanded for the revision of prices in the mid-season.
As the government endeavours to achieve the target of 12% blending (without any disruption), the current decision to hike rates will help the distilleries to speed up manufacturing.
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