CCEA Sanctions Hike In Ethanol Prices Under Ethanol Blended Petrol Programme
The CCEA also decided to provide committed price support of ₹17, 408.85 crore to the Cotton Commission of India (CCI) for the cotton seasons from 2014-15 to 2020-21.
The Cabinet Committee of Economic Affairs (CCEA) on Wednesday raised the price of ethanol extracted from sugarcane for blending in petrol by up to Rs 1.47 per litre for the 2021-22 marketing year starting this December. It also has approved a mechanism for the procurement of ethanol by state-owned oil marketing companies.
The government has continued the execution of the Ethanol Blended Petrol (EBP) Programme wherein the OMC’s (Oil marketing companies) sell petrol blended with ethanol up to 10 percent. It also allows sugarcane farmers to get lucrative prices for their produce.
The last price hike in ethanol extracted from sugarcane for blending in petrol took place in October 2021, by up to Rs.3.34 in order to scale up the EBP programme which has benefited the Sugarcane farmers alongside helping in cutting down the oil import bill.
The price hike of ethanol has come just before the upcoming state elections in Uttar Pradesh which are scheduled to be held in 2022, a state with a maximum number of Sugarcane farmers. Along with the above scenario, this decision has come in the backdrop of ongoing farmer protests against the three central farm laws.
The Central government in a statement said, “The Cabinet Committee on Economic Affairs chaired by Prime Minister, Shri Narendra Modi, has given its approval for fixing higher ethanol price derived from different sugarcane-based raw materials under the EBP (ethanol blending with petrol) Programme for the forthcoming sugar season 2020-21 during ESY 2020-21 from 1st December 2020 to 30th November 2021.”
It further stated, “The Government has decided that Oil PSEs should be given the freedom to decide the pricing for 2G ethanol as this would help in setting up advanced biofuel refineries in the country. It is important to note that grain-based ethanol prices are currently being decided by Oil Marketing Companies (OMCs) only.”
In a wake to push India’s energy security efforts furthermore, it is expected that the country’s ethanol distillation capacity shall double by 2025. According to the Indian Government, India will achieve its 20% blending target by 2025. But to achieve this targeted 20% blending of ethanol with petrol, the country shall need a 1,000-crore litre capacity.
The government has been promoting ethanol production with surplus sugar production lowering sugar prices and subsequently increasing the dues of sugarcane farmers.
The prices of ethanol derived from C heavy molasses has been increased up to Rs. 46.66 per litre from ₹45.69 and on the other hand the price of ethanol derived from the B heavy molasses has been raised to ₹59.08 per litre from ₹57.61. The CCEA has also hiked the price of ethanol derived from sugarcane juice, sugar/sugar syrup from ₹62.65/litre to ₹63.45/litre.
“The approval will not only facilitate the continued policy of the Government in providing price stability and remunerative prices for ethanol suppliers but will also help in reducing the pending arrears of Cane farmers, dependency on crude oil imports and will also help in savings in foreign exchange and bring benefits to the environment,” Union Government announced.
The National Biofuel Policy 2018 had earlier proposed a suggestive target of 20% blending of ethanol in petrol and 5% blending of biodiesel in a diesel by 2030.
Cabinet Union in its statement further said, “Consistent surplus of sugar production is depressing sugar price. Consequently, sugarcane farmers’ dues have increased due to the lower capability of the sugar industry to pay the farmers. The government has taken many decisions for the reduction of cane farmers’ dues. Intending to limit sugar production in the Country and to increase domestic production of ethanol, the Government has taken multiple steps including, allowing diversion of B heavy molasses, sugarcane juice, sugar and sugar syrup for ethanol production. Now, as the Fair and Remunerative Price (FRP) of sugarcane and ex-mill price of sugar have changed, there is a need to revise the ex-mill price of ethanol derived from different sugarcane-based raw materials.”
The government has been trying to improve farmers' income for a long time. The CCEA also decided to provide committed price support of ₹17, 408.85 crore to the Cotton Commission of India (CCI) for the cotton seasons from 2014-15 to 2020-21 (up to 30.09.2021) and also has made it compulsory for 100% food grains and 20% of sugar to be packed in jute bags.