OMCs Plans to Raise Ethanol Purchase Price Made from Damaged Foodgrains

The ethanol yield from FCI rice has been set at Rs 58.50 per litre. The government has decided to sell excess rice from FCI for ethanol production at Rs 20/kg.

"Due to increased rice prices in the open market, even the damaged grain prices have become costlier and difficult to source. Many ethanol manufacturers, who previously obtained supply from the open market, have turned to FCI for supply," said an industry official.

Because it is a commercial decision made by OMCs, the Petroleum Ministry will make the final decision, with no need for cabinet approval, according to the official.

The Food Ministry is thought to have favoured the price increase because any delay could affect processing and, ultimately, blending.

The government has set a target of 12% ethanol blending with gasoline in the ethanol year 2022-23, which began in December.

Last month, the Cabinet Committee on Economic Affairs (CCEA) approved a 2.8 to 5.9 percent increase in the price of ethanol made from various sugarcane-based raw materials for 2022-23.

As a result, the procurement price of ethanol made from C-heavy molasses has been raised from Rs 46.66 to Rs 49.41 per litre. Prices for producing ethanol from B-heavy molasses have risen from Rs 59.08 to Rs 60.73 per litre, while prices for producing ethanol from sugarcane juice or sugar syrup will rise from Rs 63.45 to Rs 65.61 per litre.

The government has also shifted the ethanol year from November to October, starting with the 2023-24 season. Previously, the ethanol fiscal year ran from December to November. It will run for 11 months this year, from December to October.