The Petroleum Ministry may soon decide to revise the price of ethanol made out of damaged food grains.

Though the industry has been demanding higher rate for ethanol, the oil marketing companies (OMCs) are likely to revise it to ₹58.50/litre from the current ₹55.54, sources said.

The rate of ethanol derived from FCI’s rice has been fixed at ₹58.50/litre. The government has decided to sell surplus rice from FCI for ethanol manufacturing at ₹20/kg.

“Due to increased prices of rice in the open market, even the damaged grain prices have become costlier and also difficult to source. Many ethanol manufacturers, who were earlier getting from open market, have turned to FCI for the supply,” said an industry official.

Since it is a commercial decision of OMCs, the Petroleum Ministry will take the final call and no need for any cabinet approval, the official said.

The Food Ministry is believed to have favoured the price revision as any delay may affect processing and ultimately blending also. The government has set a target to achieve 12 per cent ethanol blending with petrol in ethanol year 2022-23, which started from December.

Last month, the Cabinet Committee on Economic Affairs (CCEA) approved raising the price of ethanol made from various sugarcane-based raw materials in the range of 2.8 to 5.9 per cent for 2022–23.

Accordingly, the procurement price of ethanol made from C-heavy molasses has been raised from ₹46.66 per litre to ₹49.41. Prices of making ethanol from B-heavy molasses has been hiked from ₹59.08 per litre to ₹60.73 and it will rise from ₹63.45 to ₹65.61 a litre if made from sugarcane juice or sugar syrup.

The government has also changed the ethanol year from November to October to be effective from 2023-24 season. Earlier, the ethanol year was from December to November. For current year, it will run for 11 months from December to October.

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