India Raises Ethanol Purchase Prices For State-run Fuel Retailers

Indian government has fixed a price of up to Rs 65.61 for purchase of ethanol from sugar mills as the nation wants to boost blending with gasoline, oil minister Hardeep Singh Puri said on Wednesday.

India, the world's third biggest oil importer and consumer, has expedited efforts to double ethanol blending with gasoline to 20 percent from the current over 10 percent across the country from 2025/26.

Puri said 20 percent ethanol blended fuel will be sold in parts of country from April next year.

Prime Minister Narendra Modi has pledged to achieve net-zero carbon emissions by 2070, and is encouraging industries to switch to cleaner options to cut carbon footprint.

The government fixes ethanol purchase prices for fuel retailers Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp every marketing year from December, reflecting a change in floor price of sugar.

India recently raised the floor price that sugar mills must pay for cane in the season beginning 1 Oct to Rs 305 per 100 kg, from Rs 290 a year earlier.

Indian fuel retailers have floated tenders seeking to buy 5.4 billion litres of gasoline for blending in 11 months from December compared to 4.40 billion litres sought for this year, to meet blending needs as the nation's gasoline consumption is rising.

From next year, the ethanol procurement year would start from November, Puri added.

The new rates for ethanol derived from "C" heavy molasses will rise to Rs 49.41 per litre from Rs 46.66 earlier. Rates for "B" heavy molasses will increase to Rs 60.73 from Rs 59.08, and those derived from sugarcane juice/sugar/sugar syrup to Rs 65.61 from Rs 63.45, the government said in a statement.

The B-heavy molasses juice has some sucrose content left in them for sugar production, whereas C-heavy molasses is a cane by-product that has no sugar content left in it.

"All distilleries will be able to take benefit of the scheme and a large number of them are expected to supply ethanol for the ethanol blended petrol programme," the Cabinet Committee on Economic Affairs said.

Source - Reuters