The government is contemplating a plan to raise ethanol prices for the period commencing November 2024, and is also advocating for the expansion of feedstock varieties in order to achieve the 20 per cent blending goal by 2025-26, as per insider sources.
A panel led by a joint secretary from the petroleum ministry has already conducted an initial round of talks on the proposal. They added that the fair and remunerative price of sugarcane will determine the adjustment of ethanol prices.
"The price revision is being considered on priority to incentivize production and meet our blending goals," a source said, requesting anonymity.
Cooperation Minister Amit Shah underscored the need for a comprehensive approach to biofuel production and confirmed that India is on track to achieve its 20 per cent ethanol blending target by 2025-26, surpassing the original 2030 deadline.
The government has maintained the fixed prices of ethanol, which have remained unchanged since the 2022-23 season (November-October). Presently, the pricing for ethanol derived from cane juice is set at Rs 65.61 per litre, with rates for ethanol from B-Heavy and C-Heavy molasses at Rs 60.73 and Rs 56.28 per litre, respectively.
Officials regard the ethanol blending program as vital to fulfilling the country's green energy commitments and enhancing the financial stability of sugar mills.
Data from official sources indicates that ethanol blending in India has risen to 13.3 per cent as of July in the current season, up from 12.6 per cent in the 2022-23 season.
India's current total ethanol production capacity is 1,589 crore litres, with oil marketing companies procuring 505 crore litres of ethanol for blending purposes during the 2023-24 season.
According to sources, a committee is specifically examining the potential revision of ethanol prices from sugarcane.
The sugar industry has requested an increase in ethanol prices, a raise in the minimum selling price of sugar, and authorisation for sugar exports.
However, the government is placing emphasis on ethanol production and blending targets.
Queries directed to the ministries of petroleum and sugar regarding the possible price revision remained unanswered.
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