The government on Wednesday raised rates of ethanol purchased by oil marketing companies to blend with petrol and advanced the target for them to sell 20% ethanol blended petrol (EBP) by about five years from the earlier deadline of 2030 after India achieved the 10% blending target in May this year, said Union petroleum minister Hardeep Singh Puri.
The move will benefit farmers and also help reduce India’s dependence on imported crude, saving foreign exchange, he said while briefing the media about the decision of the Cabinet Committee on Economic Affairs (CCEA). EBP of 10% saves about ₹40,000 crore in forex outgo, the minister said.
India is the third largest crude oil consumer after the US and China. It imports 85% of the crude oil it processes and pays in dollars. It imported 212 million tonnes of crude oil in 2021-22, spending $120.4 billion.
The CCEA, chaired by Prime Minister Narendra Modi, approved higher ethanol price derived from different sugarcane-based raw materials under the EBP programme for the 2022-23 sugar season and ethanol supply year (ESY) 2022-23 from December 1, 2022, to October 31, 2023, the petroleum ministry said.
The price of ethanol derived from C-heavy molasses, the end product of sugar manufacture, would be increased from ₹46.66 per litre to ₹49.41 per litre, it said. The price of ethanol from B-heavy molasses, a richer intermediate in the sugar manufacturing process, has been increased from ₹59.08 per litre to ₹60.73 per litre, while the price of ethanol from sugarcane juice/sugar/sugar syrup route has been increased from ₹63.45 per litre to ₹65.61 per litre, the ministry said.
The government has also advanced the target of 20% ethanol blending in petrol from 2030 to ESY 2025-26, Puri said.
The government is considering the launch of a pilot project to start E-20 (petrol doped with 20% ethanol) from April 2023 at certain petrol pumps, he said. India would have used 4.52 billion litres of ethanol to blend in petrol during ESY ending November 30, 2022, and plans to procure 540 crore litres in the next year.