The Oil Ministry has finalized a proposal to revise ethanol prices for the 2024-25 season, which has been sent to the Cabinet for final consideration. ET NOW sources say the Cabinet will approve it soon and the price hike will be around Rs 4-5 per liter.
This comes after consultations with the Food Ministry and Oil Marketing Companies (OMCs). The Food Ministry had already suggested an increase in ethanol prices for the next season. The price hike will encourage ethanol producers and distilleries to produce more, as per India’s ethanol blending targets.
What is Ethanol?
Ethanol, as a domestically generated biofuel, presents a strategic opportunity to lessen the country's reliance on imported fossil fuels. When utilised appropriately, biofuels such as ethanol are more ecologically friendly and sustainable, helping to create a cleaner energy landscape.
Furthermore, ethanol production and use are consistent with national goals such as job creation, boosting the "Make in India" effort, helping the Swachh Bharat Mission, and contributing to the doubling of farmers' earnings. It also promotes the development of riches from trash, highlighting its significance to India's economy and energy security.
India 15% ethanol blending target
India has set a target to achieve a 15% ethanol blending in petrol by the end of this year and a 20% blending target by 2025.
At the 7th G-STIC Delhi Conference, Hardeep Singh Puri, Minister of Petroleum and Natural Gas, said India is doing well in ethanol blending and is looking at bigger picture of sustainable energy. He said, since they have achieved so much, the government has already started planning for future and looking at goals beyond 20% ethanol blending.
The government’s commitment to ethanol blending is evident in its decision to bring forward the 20% blending target from 2030 to 2025.
India needs 1,016 crore liters of ethanol
To achieve 20% blending, India needs 1,016 crore liters of ethanol. The price hike is seen as a key to encourage producers to meet this target and support the country’s energy and environment goals. Total ethanol demand is around 1,350 crore liters. To meet this demand, 1,700 crore liters of ethanol production capacity needs to be created by 2025, assuming 80% plant efficiency.
The government has calculated the ethanol demand for 20% blending based on the growth of petrol based vehicles, especially two wheelers and passenger vehicles and MS sales.
The Oil Ministry’s proposal after consulting all stakeholders, emphasizes ethanol in India’s energy plan. The Cabinet approval will open up more ethanol production for the country’s sustainable energy future.
