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The Cabinet Committee on Economic Affairs on Thursday hiked the ethanol procurement price for supply year 2020-21.

“The government has increased the price of sugar juice-based ethanol to ₹62.65 a litre. Ethanol based on B-heavy molasses will now be procured at ₹57.61 a litre and C-heavy-based ethanol at ₹45.69 per litre. Goods and Services Tax and transportation cost will also be paid by oil marketing companies,” Union Minister Prakash Javadekar said after the Cabinet meeting.

An official statement said the higher price for ethanol derived from different sugarcane-based raw materials under the Ethanol Blended Petrol (EBP) programme is applicable for the forthcoming sugar season 2020-21 during Ethanol Supply Year (ESY) from December 1, 2020 to November 30, 2021.

“In order to offer fair opportunity to the localised industry within the State and reduce criss cross movement of ethanol, oil marketing companies (OMCs) shall decide the criteria for priority of ethanol from various sources taking in account various factors like cost of transportation and availability. This priority will limit the excisable boundaries of the State or Union Territory for production. Same order of preference will be given thereafter for import of ethanol from other States wherever required,” the statement said.

Green alternative

The Centre has been implementing EBP programme under which OMCs sell petrol blended with ethanol up to 10 per cent. This programme was extended to the whole of India except Union Territories of Andaman Nicobar and Lakshadweep islands with effect from April 1, 2019 to promote the use of alternative and environment-friendly fuels. This intervention also seeks to reduce import dependence for energy requirements and give a boost to the agriculture sector.

“The Centre has notified the administered price of ethanol since 2014. For the first time during 2018, a differential price of ethanol based on raw material utilised for ethanol production was announced by the Government. These decisions have significantly improved the supply of ethanol; ethanol procurement by public sector OMCs has increased from 38 crore litre in ESY 2013-14 to contracted over 195 crore litre in ESY 2019-20,” the statement added.