Revision of Ethanol Procurement Price Under Indias Ethanol Blended Petrol (EBP) Program

Ethanol is a volatile, flammable, colorless liquid. It is also known as ethyl alcohol. Widely used in beverages and thermometers, ethanol is an alcohol that, otherwise, affects the function of the central nervous system. Ethanol is present in alcoholic drinks (beer, wine, spirits) when diluted.

Ethanol can also be mixed with gasoline to form different blends. As the ethanol molecule contains oxygen, it allows the engine to burn the fuel more completely, resulting in fewer emissions and thereby reducing the occurrence of environmental pollution.

The Ethanol Blended Petrol (EBP) Program of the Government of India

Recently, theCabinet Committee on Economic Affairs(CCEA), of India, chaired by the Prime MinisterNarendra Modi, has approved revision of ethanol procurement price for Public Sector Oil Marketing Companies (OMCs) for the Ethanol Supply Year (ESY) 2024-25 starting from 1stNovember, 2024 to 31stOctober 2025 under the Ethanol Blended Petrol (EBP) Program of the Government of India.

Accordingly, the administered ex-mill price of ethanol for the EBP Programme derived from C Heavy Molasses (CHM) for the Ethanol Supply Year 2024-25 (1st November 2024 to 31st October 2025) has been fixed at Rs.57.97 per litre from Rs.56.58 per litre.

Government has been implementing Ethanol Blended Petrol (EBP) Program wherein OMCs sell petrol blended with ethanol up to 20%. This Program is being implemented across the country to promote the use of alternative and environment friendly fuels. This intervention also seeks to reduce import dependence for energy requirements and give boost to agriculture sector.

Ethanol Blending in Petrol 

During the last ten years (as on 31.12.2024), ethanol blending in petrol by Public Sector Oil Marketing Companies (OMCs) has resulted in approximate savings of more than Rs.1,13,007crore of foreign exchange and crude oil substitution of about 193 lakh metric tonnes.

As a step in this direction, OMCs plan to achieve 18% blending during the ongoing ESY 2024-25.

All these steps also add to ease of doing business and achieving the objectives of Atmanirbhar Bharat.

This will help in quantifiable forex savings, crude oil substitution, environmental benefits and early payment to cane farmers.