Government Raised Ethanol Prices For C-Heavy Molasses by ₹1.39

On January 29, 2025, the Cabinet Committee on Economic Affairs (CCEA), has given its approval to revise the ethanol procurement prices for public sector oil marketing companies (OMCs) for the ethanol supply year (ESY) 2024-25. This revision is part of the Ethanol Blended Petrol (EBP) programme, which runs from November 1, 2024, to October 31, 2025. The ex-mill price of ethanol derived from C-heavy molasses has been increased by ₹1.39, raising it from ₹56.58 per litre to ₹57.97 per litre.

Government’s Strategy for Ethanol Availability

The government anticipates that the 3% increase in C-heavy molasses ethanol prices will help ensure there is enough ethanol available to meet blending targets. This price revision aligns with the Cabinet’s focus on sourcing ethanol from more cost-effective supplies, such as cereals like rice. For example, on January 17, the Centre reduced the reserve price of FCI rice by ₹550 per quintal, setting it at ₹2,250 for states and ethanol producers.

The prices for B-heavy molasses and sugarcane ethanol remain unchanged. B-heavy molasses continues at ₹60.73 per litre, while sugarcane-derived ethanol stays at ₹65.61 per litre. As a result, the procurement costs for OMCs remain largely unaffected by these price revisions.

Expansion of Ethanol Production Capacity

To support the accelerated blending goals, the government is expanding ethanol distillation capacity to 1,713 crore litres per year. In addition, long-term off-take agreements and incentives for dedicated ethanol plants in states with a production deficit are expected to further bolster the programme’s success.

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