The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved a mechanism for procurement of ethanol by Oil Marketing Companies (OMCs) and hiked ex-mill price for ethanol derived out of C-heavy molasses.


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Molasses is a viscous product resulting from refining sugarcane or sugar beets into sugar.


The price of ethanol produced from C-molasses by Rs 2.85 per litre to Rs 43.70 for the new season starting December 2018. Also, for the first time, the Cabinet has fixed ex-mill price of Rs 47.49 per litre for ethanol derived from B-heavy molasses in order to encourage sugar mills to divert from sugar production.


As the price of ethanol is based on estimated FRP for sugar season 2018-19, it will be modified by MoP&NG as per actual Fair & Remunerative Price (FRP) declared by the government. For ethanol supply year 2019-20, ethanol prices will be modified by MoP&NG as per normative cost of molasses and sugar derived from FRP of sugarcane, a government statement said.


Ethanol Blended Petrol (EBP) Programme was launched by the Government in 2003 on pilot basis which has been subsequently extended to the Notified 21 States and 4 Union Territories to promote the use of alternative and environmental friendly fuels. This intervention also seeks to reduce import dependency for energy requirements and give boost to agriculture sector.