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Government increased the price of ethanol
Why in the news ?
- In order to cut India’s oil import dependence as well as to give higher price for sugarcane, the government increased the price of ethanol, used for blending in petrol, to Rs 43.70 from Rs 40.85 per litre.
More on news
- India, which is more than 80% dependent on imports to meet its oil needs, has mandated blending of up to 10% ethanol in petrol, but inadequate availability has restricted this to below 4%.
- Government also fixed the price of ethanol produced from intermediary or B-molasses at Rs 47.49 per litre — a move that would help mills divert cane juice for ethanol manufacturing during surplus years.
- Higher price for ethanol extracted in the process of making sugar from sugarcane will incentivise higher ethanol production.
- So far, the price was only fixed for ethanol produced from C-molasses or final molasses.
- Stating that the government intends to create more holistic framework for ethanol, power minister said the prices have been fixed based on estimated Fair and Remuneration Price (FRP) for sugar season 2018-19.
- The price will be modified by the oil ministry as per actual FRP, which is the minimum price that mills need to pay to cane growers for their produce.
- Sugar mills are incurring losses as prices have fallen below production cost on account of record output of 31.5 million tonne in 2017-18 season as against the annual domestic demand of 25 million tonne.
Source
The Hindu