Cabinet Revises Ethanol Price for Public Sector OMCs- Prices to Be Market Driven (Download PDF)

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Cabinet committee on Economic Affairs (CCEA) cut down ethanol price for supply to Public Sector Oil Marketing Companies (OMCs) to Rs. 39 per L from Rs 48.90-49.90. The ethanol is used for Ethanol Blended Petrol (EBP) Programme.

Cabinet committee on Economic Affairs

Cabinet Committee on Economic Affairs

Cabinet committee on Economic Affairs

Administered price of ethanol for this programme will be Rs. 39 per liter for the next sugar season 2016-17. It maps to ethanol supply period 1st December 2016 to 30th November 2017.

Key Aspects

  • Intervention to decrease import dependency for energy requirements.
  • Indian fuel is blended up to 10% of ethanol with petrol to reduce import of crude oil but the scheme was not followed because of limited ethanol supply and high prices.
  • Recently  because of fall in crude oil prices there was even less motivation to mix expensive ethanol.
  • Previously, ethanol suppliers charged a basic price and transportation charges were decided by the oil marketing companies.

About EBP (Ethanol Blended Petrol) Programme

  • EBP: Ethanol Blended Petrol
  • Launched in 2003 by the Union Government.
  • Promote the use of alternate environment friendly fuels.
  • Reduce import dependency for energy requirements.
  • Ethanol is biofuel derived from Sugarcane molasses (by-product in the conversion of sugarcane to sugar), corn, sorghum etc.
  • However, since 2006, OMCs were not able to receive offers for the required quantity of ethanol against the tenders because of various issues like:

    • State Specific issues
    • Supplier related issues
    • Pricing issues of ethanol.

Benefits

  • Government decision to improve the supply of ethanol.
  1. In 2014-15 Ethanol supplies increased to 67.4 crore.
  2. Projected supply of Ethanol in 2015-16 is around 120 crore litres.
  • Fixing the delivered price of ethanol will facilitate price stability for the ethanol suppliers.
  • Ethanol reduces the vehicular emissions specially carbon monoxide emissions.
  • Ethanol is a cheaper than petrol and cheaper to manufacture.

- Published/Last Modified on: October 14, 2016

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