In Bid to Bring Down Fuel Costs, Cabinet Hikes Ethanol Price by 25% to Incentivise Blending


In Bid to Bring Down Fuel Costs, Cabinet Hikes Ethanol Price by 25% to Incentivise Blending

At a time when petrol and diesel prices in India have breached record levels, the Union Cabinet on Wednesday hiked the market price of ethanol by 25 per cent in a bid to incentivise its production by sugar mills. Ethanol has long been approved as an alternate fuel that can be blended with petrol to bring down its cost along with reducing carbon emissions.

One of the primary reasons for the rising fuel prices is the fact that India imports more than 80 per cent of its oil needs. With the rupee depreciating and crude prices going up, India’s import bill has been on the rise as well. Now, with domestic ethanol production taking shape, India will need lesser imported oil. The move is likely to attract many companies to divert sugar business to ethanol, which, in the long run, will bring down fuel costs.

The country’s target for ethanol-blended petrol has mostly been missed on account of inadequate ethanol production. The Centre has set a target of 10 per cent ethanol blending in petrol by 2022. However, blending was 3.5 per cent in the 2016-17 sugar season and 4 per cent in the 2015-16 season. Read More

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