Ethanol Incentive: ISMA Welcomes Rs 6.87/litre Boost

New Delhi, Dec 29 (PTI) Sugar industry body ISMA on Friday hailed the move by state-owned petroleum companies to provide incentive of Rs 6.87 per litre on ethanol made from C-heavy molasses but said price should be further increased.

State-owned fuel retailers have offered Rs 6.87 per litre incentive on ethanol made from C-heavy molasses to shore up supplies.

"The industry appreciates the incentive of Rs 6.87/ litre on supply of ethanol from C-Heavy Molasses that takes the price to 56.28/ litre," M Prabhakar Rao, President of Indian Sugar & Bio-energy Manufacturers Association (ISMA), said in a statement.

However, he said, it should be "further increased to help the industry navigate better in these uncertain times and ensure timely cane price payments, mitigation of losses and help augment ethanol production."

Rao said the industry is paying high interests on their investments made to increase ethanol production capacity, which is now not being utilised fully.

He reiterated industry's appeal to ban the export of molasses with immediate effect, besides further increase in price of ethanol from B-Heavy Molasses and sugar cane juice.

In a post on X on Friday, the oil ministry said, "In order to maximise ethanol production from C-molasses route and improve the overall availability of ethanol for ethanol blended petrol programme, public sector oil marketing companies announce an incentive of Rs 6.87 per litre for ethanol from C-heavy molasses".

C molasses is a byproduct of sugar factories and its utilisation for ethanol production is an effective way to promote green economy, it said.

Oil firms are mixing 12 per cent ethanol in petrol as part of a government programme to cut consumption of fossil fuel and import dependence.

Oil marketing companies Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL) announced the incentive.

The companies said the decision was taken to promote the supply of ethanol from C-heavy molasses.

The incentive amount will be payable over and above the previous Ethanol Supply Year (ESY) procurement price of Rs 49.41 per litre.

The government will decide the prices of ethanol produced from B-heavy molasses and juice in a few days. The government can offer additional ethanol from C-heavy against lapsed allocations of juice or B-heavy ethanol.

The government might also convert the existing revised allocations of juice or B-heavy ethanol for supply as C-heavy.

The incentive will not be applicable on quantities supplied in ESY 2023-24 against allocations/purchase orders of ESY 2022-23.