Ethanol blending by public sector oil marketing companies (OMCs) in India has saved more than Rs1.13tn ($13bn) in foreign exchange (forex) over the past ten years, substituting 19.3 million tonnes (mt) of crude oil.
The savings were achieved as a result of the Government of India’s ethanol blended petrol (EBP) programme launched in 2014, wherein OMCs sell petrol with an ethanol blend of up to 20%.
The programme is being executed nationwide to encourage alternative and eco-friendly fuel usage. This initiative also aims to diminish energy import dependence and bolster the agricultural sector.
To further encourage the use of ethanol-blended fuel, the Cabinet Committee on Economic Affairs (CCEA), led by Prime Minister Narendra Modi, has sanctioned an upward revision of the ethanol procurement price for public sector OMCs for the ethanol supply year (ESY) 2024–25.
This period commenced on 1 November 2024 and will conclude on 31 October 2025.
The revised ex-mill price of ethanol derived from C heavy molasses (CHM) is now set at Rs57.97 per litre for ESY 2024–25, an increase from the previous Rs56.58 per litre.
This move aims to ensure price stability and offer remunerative prices to ethanol suppliers, while simultaneously reducing India's reliance on crude oil imports, saving foreign exchange and providing environmental benefits.
The 3% increase in CHM ethanol prices is expected to guarantee adequate ethanol availability to meet the heightened blending targets.
Blending rose from 380 million litres in 2013–14 to 7.07 billion litres in 2023–24, reaching an average of 14.6%.
The government has expedited its 20% ethanol blending target from 2030 to ESY 2025–26 and has released the Roadmap for ethanol blending in India 2020–25 for public consultation.
In line with this goal, OMCs aim to reach 18% blending during the ongoing ESY 2024–25.
Further measures include the expansion of ethanol distillation capacity to 17.13 billion litres per annum and long-term off-take agreements for establishing dedicated ethanol plants in ethanol-deficient states.
In addition, single-feed distilleries are being converted to multi-feed, the availability of E-100 and E-20 fuels is being boosted, and flexi-fuel vehicles are being introduced.
