India Revises Ethanol Procurement Price to Boost Blended Fuel Programme

Introduction

The Cabinet Committee on Economic Affairs has approved a revised ethanol procurement price of ₹57.97 per litre for the Ethanol Supply Year 2024–25, up from ₹56.58 per litre. This strategic decision supports the Ethanol Blended Petrol (EBP) Programme, aiming to strengthen energy security, support farmers, and reduce crude oil imports.

🌾 Background: What is the Ethanol Blended Petrol (EBP) Programme?

• Allows petrol blended with up to 20% ethanol to be sold across India
• Promotes the use of biofuels as alternatives to fossil fuels
• Implemented nationwide to reduce carbon emissions and dependency on imported oil

💱 Impact on Foreign Exchange and Crude Oil Imports

• Over the past decade, ethanol blending has saved ₹1,13,007 crore in foreign exchange
• Has replaced approximately 193 lakh metric tonnes of crude oil
• Helps India shield its economy from global oil price volatility

👩‍🌾 Benefits for Sugarcane Farmers

• Ethanol is mainly derived from sugarcane molasses
• Revised pricing provides better remuneration for sugarcane suppliers
• GST and transportation charges will be paid separately, ensuring farmers benefit directly

🏭 Growth in Ethanol Production Capacity

• India’s ethanol production capacity now stands at 1713 crore litres/year
• Long Term Off-take Agreements signed to support:
  • Establishment of Dedicated Ethanol Plants
  • Especially in low-production regions

🛣️ Roadmap and Blending Targets

• Original 20% blending target was set for 2030
• Now advanced to 2025–26
• For the current year (2024–25), the government targets 18% blending

🧭 A part of India’s 2020–2025 Ethanol Roadmap

💼 Investment and Employment Generation

• Boosted investments in distilleries (both greenfield and brownfield)
• Triggered development in:
  • Storage
  • Transportation logistics
• Creates employment opportunities and supports the rural economy

🌱 Environmental Sustainability

• Ethanol is a renewable and cleaner-burning fuel
• Blending reduces:
  • Greenhouse gas emissions
  • Urban air pollution
• Supports India’s climate goals under the Paris Agreement

Conclusion

The revision in ethanol procurement price is a well-timed move to promote energy diversification, support agricultural incomes, and strengthen India’s green economy. As the country races toward its 2025 blending targets, ethanol remains central to achieving a cleaner, self-reliant, and farmer-friendly fuel future.