Govt raises ethanol procurement price by 5% for 2017-18

Sugar mills welcome move, say supply will increase, perhaps to 2015-16 level

In a boost for the sugar sector, the Cabinet Committee on Economic Affairs (CCEA) has raised the basic ethanol price by five per cent, in a bid to get distilleries to increase their supply of the product to oil marketing companies (OMCs) for blending with petrol.

Chaired by Prime Minister Narendra Modi, the CCEA approved a price of Rs 40.85 a litre for procurement season 2017-18 (beginning December 2017), up from Rs 38.97 a litre the previous season. The applicable goods and services tax (GST) of 18 per cent and transport charges would be borne by the OMCs.

"The price increase will