With oil prices on the uptake the need to blend ethanol at a faster pace is the need of the hour. A boon for sugar mills considering that India imports 20% of its oil requirements.
Coming to the aid of cash-starved sugar mills, the Cabinet Committee on Economic Affairs has decided to raise the prices of ethanol derived out of molasses by `2.85 a litre. The Committee decided to raise the price of ethanol derived out of C-heavy molasses to `43.70 per litre from `40.85, excluding GST and transportation charges.
Similarly, for the first time, the CCEA has fixed the price of ethanol derived from B-heavy molasses and sugarcane juice at `47.49 per litre, excluding GST and transportation charges. These prices are based on the estimated Fixed and Remunerative Price of sugarcane and will be applicable for the ethanol supply year, starting December 2018 and ending November 2019.
He also said that this will be one more step towards achieving 10% ethanol blending, for which 313 crore litres of ethanol is required, according to industry body ISMA. More ethanol blending translated into lower crude imports. The ethanol procured by Indian Oil, HPCL and Bharat Petroleum has increased from 38 crore litres in 2013-14 to an estimated 140 crore litres in 2017-18. Mills are expecting revenue realisation of over `5,000 crore from sale of ethanol to OMCs during the 2017-18 sugar season (October-September).