The Cabinet on Wednesday hiked the market price of ethanol produced directly from sugarcane juice by about 25% in a bid to incentivise its production by sugar mills. While higher production and availability of the alternative fuel will help reduce the crude oil import, diversifying sugarcane juice for producing ethanol will help the government check excess sugar production, which has become unmanageable.

Union petroleum minister Dharmendra Pradhan said, “A new category of procurement is being introduced to incentivise sugar mills that divert all their sugar cane processing capacity for manufacturing ethanol. The mills will be offered Rs 59.13 a litre for diverting 100% sugarcane juice to production of ethanol thereby not producing any sugar.” The price of ethanol derived from B-heavy molasses has been hiked from Rs 47.49 a litre to Rs 52.43 a litre. The price of ethanol from Cheavy molasses has been lowered from Rs 43.7 a litre to Rs 43.46 a litre. The revised price is applicable for the forthcoming sugar season 2018-2019.