Public secto fuel retailers have raised procurement prices for ethanol made from C-heavy molasses by ₹6.87 per litre to ₹56.28 per litre, according to industry sources and a document reviewed by Reuters on Friday.
The move is aimed at boosting production of ethanol, which is used for blending with petrol. More than 10% of a litre of petrol sold in India is ethanol and the nation has set a target to raise blending to 20% by 2025.
Earlier this year, the government directed sugar mills not to use cane juice or syrup to produce ethanol, as New Delhi tried to increase sugar supplies by curtailing ethanol output.
The government allowed mills to produce ethanol only from C-heavy molasses, a cane by-product that has hardly any sugar content left in it.