Petroleum Ministry to revise price of ethanol made from damaged food grains

The Petroleum Ministry may decide soon to change the price of ethanol made from food grains that have been damaged.

Even though the industry has been asking for a higher rate for ethanol, sources say it is likely that the oil marketing companies (OMCs) will change it to ₹58.50/litre from the current ₹55.54.

The price per litre of ethanol made from rice grown by the Food Corporation of India (FCI) has been set at 58.50. The government has decided to charge ₹20/kg for FCI’s extra rice, which will be used to make ethanol.

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‘Because the price of rice on the open market has gone up, even the broken grains are now more expensive and harder to find.’ An industry official said that many companies that used to get their ethanol from the open market are now getting it from FCI.

Since it’s a business decision made by OMCs, the Petroleum Ministry will make the final decision, and cabinet approval isn’t needed, an official said.

People think that the Food Ministry liked the price change because any delay could affect processing and, in the end, blending as well. In the ethanol year 2022-23, which began in December, the government has set a goal of blending 12% ethanol with gasoline.

The Cabinet Committee on Economic Affairs (CCEA) agreed last month to raise the price of ethanol made from sugarcane-based raw materials by 2.8% to 5.9% for the 2022–23 fiscal year.

So, the price buying ethanol made from C-heavy molasses has gone up from ₹46.66 per litre to ₹49.41 per litre. Prices for making ethanol from B-heavy molasses have gone up from ₹59.08 per litre to ₹60.73 per litre, and prices for making ethanol from sugarcane juice or sugar syrup will go up from ₹63.45 per litre to ₹65.61 per litre.

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For the 2023-2024 season, the government has also moved the start of the ethanol year from November to October. The ethanol year used to run from December to November. This year, it will run from December to October, which is 11 months.