Cabinet Approves Revised Ethanol Procurement Prices For 2024-25

The Cabinet Committee on Economic Affairs (CCEA), led by Prime Minister Narendra Modi, has approved revised ethanol procurement prices for Public Sector Oil Marketing Companies (OMCs). The new price for ethanol derived from C Heavy Molasses (CHM) is Rs 57.97 per litre, up from Rs 56.58 per litre. This revision applies to the Ethanol Supply Year (ESY) 2024-25, spanning November 1, 2024, to October 31, 2025.

The government has taken multiple steps to expand ethanol distillation capacity to 1,713 crore litres per year including, Long Term Off-take Agreements (LTOAs) to set up Dedicated Ethanol Plants (DEPs) in ethanol deficit States; encourage conversion of single feed distilleries to multi feed; availability of E-100 and E-20 fuel; launch of flexi fuel vehicles and more.

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According to official data, During the last ten years (as on 31.12.2024), ethanol blending in petrol by Public Sector Oil Marketing Companies (OMCs) has resulted in approximate savings of more than Rs 1,13,007crore of foreign exchange and crude oil substitution of about 193 lakh metric tonnes.

Ethanol blending by Public Sector Oil Marketing Companies (OMCs) has increased from 38 crore litre in Ethanol Supply Year 2013-14 (ESY – currently defined as ethanol supply period from 1stNovember of a year to 31st October of the following year) to 707crore litre achieving average blending of 14.60%in ESY 2023-24.

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The Ethanol Blended Petrol (EBP) Programme allows OMCs to blend up to 20% of ethanol with petrol. The revised pricing will ensure stable ethanol availability for the blending process. The government has already set a target of achieving 18% ethanol blending in petrol during ESY 2024-25, with an overall goal of reaching 20% by ESY 2025-26.