A cabinet committee on Wednesday approved raising the price of ethanol payable under the government’s ethanol blending programme to Rs 40.85 a litre applicable for the forthcoming sugar season beginning next month. “The Cabinet Committee on Economic Affairs (CCEA) has approved revision in the price of ethanol under Ethanol Blended Petrol (EBP) programme for supply to the public sector oil marketing companies. “The revised price of ethanol would be fixed at Rs 40.85 per litre under EBP and will be applicable for the forthcoming sugar season 2017-18,” a Petroleum Ministry release said here after a cabinet meeting. “The revised price will be applicable during ethanol supply period from 1st December 2017 to 30th November 2018,” it said.

The current price of ethanol procurement is Rs 39 per litre, which was fixed last year. The CCEA also decided that the “GST (Goods and Services Tax) and transportation charges will also be payable additionally,” it added. “The approval will facilitate the continued policy of the government in providing price stability and remunerative prices for ethanol suppliers,” the ministry said. “It will also help in reducing dependency on crude oil imports, saving in foreign exchange and benefits to the environment,” it added.

Last year, with sugar prices rising and global crude rates falling, which increased losses being incurred by the state-run oil firms, the government had lowered the ethanol price to Rs 39 a litre, from the earlier price range fixed at Rs 48.50 to 49.50 per litre. The EBP programme was launched in 2003 to promote use of alternative and environmental-friendly fuels and to reduce dependency on foreign fuel imports. Since 2006, however, oil companies were unable to get offers for the required quantity of ethanol against the tenders floated by them due to various constraints in supply and pricing.

In order to augment the supply of ethanol, the government in 2014 decided to fix the delivery price.