Govt hikes ethanol price, targets 12% blending by 2023

New Delhi: The government on Wednesday hiked the price of ethanol used for blending in petrol as it looked to raise the doping quantity to cut India's reliance on imported oil. The Cabinet Committee on Economic Affairs (CCEA), headed by Prime Minister Narendra Modi, raised the price of ethanol from all three varieties, Oil Minister Hardeep Singh Puri told reporters here.

The price of ethanol extracted from sugarcane juice was increased to Rs65.61 per litre, from the current Rs63.45 per litre for the supply year beginning December 2022. The rate for ethanol from the C-heavy molasses route has been increased to Rs49.41 per litre, from Rs46.66 per litre currently, and that of ethanol from the B-heavy route to Rs60.73 per litre, from Rs59.08 per litre, he said.

At present, 10 per cent ethanol is blended in petrol (10 per cent ethanol, 90 per cent petrol) and the government is looking to double this quantity by 2024-25.

"We have saved about Rs40,000 crore in forex outgo from 10 per cent blending besides benefiting the farmers," he said, adding a pilot to start E-20 (petrol with 20 per cent ethanol) will start from April 2023 at select petrol pumps.

The use of ethanol, extracted from sugarcane as well as broken rice and other agri produce, will help the world's third-largest oil consumer and importing country cut its reliance on overseas shipments. India currently is 85 per cent dependent on imports for meeting its oil needs. As much as 452 crore litre of ethanol was blended in petrol during the supply year ending November 30, 2022. For the next year, 540 crore litres procurement is being targeted with an eye to start larger volumes of blending.