CCEA approves revision of ethanol prices for supply to Public Sector Oil Marketing Companies

Oct 14, 2016 08:08 IST

Cabinet Committee on Economic Affairs (CCEA) on 13 October 2016 approved the mechanism for revision of ethanol price for supply to Public Sector Oil Marketing Companies (OMCs) to carry out the Ethanol Blended Petrol (EBP) Programme.

The administered price of ethanol for the Programme will be 39 rupees per litre for the next sugar season from 1 December 2016 to 30 November 2017.

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Key Highlights

• Charges will be paid to the ethanol suppliers as per actuals in case of Excise Duty and VAT or GST and transportation charges as decided by the oil marketing companies.

• The prices of ethanol will be reviewed and suitably revised by Government at any time during the ethanol supply period depending upon the prevailing economic situation and other relevant factors.

The revision in ethanol prices will facilitate Government in providing price stability and remunerative prices for ethanol suppliers.

Ethanol Blended Petrol (EBP) Programme

Union Government in 2003 launched the Ethanol Blended Petrol (EBP) Programme to promote the use of alternative and environment friendly fuels. The programme also sought to reduce import dependency for energy requirements.

However, since 2006, OMCs were not able to receive offers for the required quantity of ethanol against the tenders floated by them due to various constraints like State Specific issues, Supplier related issues including Pricing issues of ethanol.

Decision to augment the supply of ethanol

To end constraints and augment the supply of ethanol, government on 10 December 2014 placed a mechanism for pricing of ethanol under which the delivered price of ethanol at OMC depots was fixed in the range of 48.50 rupees per litre to 49.50 rupees per litre including Central/State Government taxes and transportation charges.

Effect of the Decision

• The decision helped in improving the supply of ethanol.

• Ethanol supplies increased to 67.4 crore litres in 2014-15 and the projected supplies for ethanol supply year 2015-16 are around 120 crore litres.

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