The Ethanol manufacturers urge PM Modi to raise ethanol procurement price

Published on: 27-Nov-2023

Ethanol manufacturers have written to the Ministry of Petroleum and Natural Gas and Prime Minister Shri Narendra Modi to increase the procurement price of ethanol made from cereals and maize. Ethanol is being prepared especially from damaged grains and maize. In India, ethanol is produced from two sources. One is wheat and the other is rice.

Demand for increase in purchase price of ethanol 

According to ethanol manufacturers, the procurement price of ethanol from cereals (rice) should be Rs 69.54 per litre and that of maize should be Rs 76.80 per litre. This will ensure continuous supply in the ethanol supply year 2023-24 starting from the month of November.

In 2022-23, the procurement price of ethanol made from damaged grains was fixed at Rs 64 per litre and that of maize at Rs 66.07 per litre. The ethanol manufacturers have demanded an increase in the procurement price after the central government did not announce the purchase price of ethanol produced from sugarcane. It is usually announced in early November. On the other hand, the Food Corporation of India (FCI) has not maintained the supply of surplus rice.

GEMA demands fixation of feedstock prices 

The Grains Ethanol Manufacturers Association (GEMA) has urged the Prime Minister, Shri Narendra Modi and the Petroleum Minister, Shri Hardeep Puri to fix the cost price based on the cost of feedstock (damaged grains and maize) available in the open market in today's time.


How much ethanol has been provided to the oil marketing companies? 

In the ethanol supply year 2023-24, 2.9 billion litres of grain-based ethanol has been made available to OMCs. The share of damaged foodgrains was 54%, FCI subsidised supply was 15% and maize was 31%. Oil Marketing Companies have floated tender for supply of 8.25 billion litres of ethanol to achieve the target of 15% blending ethanol in ethanol supply year 2023-24. Of this, 2.9 billion litres of ethanol is supplied from grain-based sources. The remaining supply is from sugarcane-based molasses.

The manufacturers of grain based ethanol have said that the price of sugarcane based ethanol can be fixed for the entire year. The reason for this is that sugarcane prices remain stable. However, grain-based ethanol prices are determined on a daily basis. Many times due to supply and demand are also determined on the basis of hours.