CCEA approves revision of ethanol prices

Cabinet Committee on Economic Affairs on Wednesday approved to fix the ex-mill price of ethanol derived out of B heavy molasses / partial sugarcane juice to Rs.52.43 per litre, from an earlier price of Rs. 47.13 per litre.

In this decision, the cabinet committee has not only revised or fixed the price of ethanol derived from B heavy molasses/ partial sugarcane juice but also fixed a higher price for 100 per cent sugarcane juice ethanol for the forthcoming sugar season 2018-19 during ethanol supply year from December 1 2018 to November 30, 2019.

It has also decided to fix the ex-mill price of ethanol derived from 100 per cent sugarcane juice at Rs.59.13 per litre (from prevailing price of Rs.47.13 per litre) for those mills who will divert 100 per cent sugarcane juice for production of ethanol thereby not producing any sugar.

Additionally, Goods and Services Tax (GST) and transportation charges will also be payable. Oil Marketin Companies (OMCs) have been advised to fix realistic transportation charges so that long-distance transportation of ethanol is not disincentivised.

The decision has also fixed a priority order for ethanol in a particular order. The topmost priority will be given to 100 per cent sugarcane juice followed by B heavy molasses / partial sugarcane juice, to be further followed by C heavy molasses and placing Damaged Food grains/other sources at the last of order.

It is expected that this decision will have a credible impact on the sugar industry. The decision will serve multiple purposes of reducing excess sugar in the country, increasing liquidity with the sugar mills for settling cane farmers' dues and making higher ethanol available for Ethanol Blended Petrol (EBP) Programme.

The scheme will benefit all distilleries as large numbers of them is expected to supply ethanol for the EBP programme. It will also minimise the difficulty of sugarcane farmers as the remunerative price to ethanol suppliers will help in reduction of cane farmers' arrears.