Government Considers Ethanol Price Hike to Boost Production and Meet Blending Targets

The Indian government is deliberating a proposal to raise ethanol prices for the 2024-25 season in a bid to incentivize production and achieve the ambitious 20% ethanol blending target by 2025-26. This move comes as part of a broader strategy to diversify feedstocks and bolster the country’s ethanol supply.
Sources close to the discussions reveal that a committee, led by a joint secretary from the petroleum ministry, has already conducted initial meetings regarding the price adjustment. The proposed increase is expected to align with the fair and remunerative price of sugarcane, a key raw material for ethanol production.
“The revision of ethanol prices is being considered as a priority to encourage greater production and to ensure we meet our blending targets,” an anonymous source involved in the discussions stated.
The proposed price hike aims to make ethanol production more financially viable for producers, thereby boosting the supply of ethanol available for blending with petrol. This is a crucial step toward reducing the country’s dependency on imported fossil fuels and advancing its renewable energy goals.
In addition to the price hike, the government is exploring ways to diversify feedstocks used in ethanol production, which may include alternative crops and agricultural residues. This diversification is intended to enhance the sustainability and resilience of the ethanol supply chain.
The ethanol blending program is part of India’s broader efforts to promote cleaner fuels and support environmental sustainability. By increasing ethanol blending, the government hopes to reduce greenhouse gas emissions and support the agricultural sector.
The decision on the price hike will be finalized after further consultations and assessments, with the aim of implementing changes in time for the start of the new season in November 2024. The government’s proactive approach reflects its commitment to achieving energy security and supporting the domestic agricultural economy.