The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved a hike in the price for procurement of ethanol by oil marketing companies (OMCs) by over Rs 3 increasing the rate for the clean fuel derived out of 'B' heavy molasses from the current Rs 47.13 per litre to Rs 52.43.
Briefing reporters here following a cabinet meeting, Petroleum Minister Dharmendra Pradhan said the CCEA had also decided to increase the ex-mill price of ethanol derived fully from sugarcane juice at Rs 59.13 per litre for those mills who will divert thier total sugarcane juice for ethanol production without producing any sugar.
A Petroleum Ministry release said the cabinet approved prices are valid for the sugarcane season from December 2018 to November 2019.
"The cabinet has given its approval to revise/fix the price of ethanol derived from B heavy molasses/partial sugarcane juice and fix a higher price for 100 per cent sugarcane juice based ethanol for the forthcoming sugar season 2018-19 during ethanol supply year from 1st December 2018 to 30th November 2019 to Rs 52.43 per litre (from prevailing price of Rs.47.13 per litre)," it said.
"The cabinet has also decided to fix the ex-mill price of ethanol derived from 100% sugarcane juice at Rs 59.13 per litre, from prevailing price of Rs 47.13, for those mills which will divert 100 per cent of sugarcane juice for production of ethanol, thereby not producing any sugar," Pradhan said.
The government said the GST and transportation charges will also be payable, while OMCs have been advised to fix realistic transportation charges so that long distance transportation of ethanol is not disincentivised.
"The decision will serve multiple purposes of reducing excess sugar in the country, increasing liquidity with the sugar mills for settling cane farmers' dues and making higher ethanol available for the Ethanol Blended Petrol (EBP) programme," he said.
All distilleries will be able to take benefit of the scheme and a large number of them are expected to supply ethanol for the EBP programme, he added.
The EBP programme, started in 2003, aims to bring down India's imports of petroleum products, for the country that imports over 80 per cent of its oil requirements.
The statement noted that as compared to ethanol derived from C heavy molasses, diversion of B heavy molasses reduces the sugar content by about 20 per cent and increases ethanol availability by about 100 per cent.
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