Centre hikes ethanol prices by up to Rs 1.47 per litre ahead of Uttar Pradesh Assembly polls

The Centre on Wednesday increased the price of ethanol by up to Rs 1.47 a litre, a move that will help sugar mills make timely payout to cane growers at a time when Uttar Pradesh, a leading sugarcane producer, goes for polls early next year.

The Cabinet Committee on Economic Affairs gave its nod to hike the price of sugarcane-based ethanol to Rs 63.45 a litre from Rs 62.65, an increase of 80 paise.

The rate for ethanol derived from B-heavy molasses and C-heavy molasses has also been hiked by Rs 1.47 per litre and 97 paise per litre, respectively.

The new prices of ethanol will come into effect from December 1, Minister for I&B Anurag Thakur told reporters here.

The rate for ethanol from B-heavy molasses has been increased to Rs 59.08 per litre from Rs 57.61 per litre and that of C-heavy molasses-produced e hiked to Rs 46.66 per litre from Rs 45.69 per litre.

The decision to increase the price of ethanol comes ahead of the Uttar Pradesh assembly elections where farmers from western parts of the state are predominantly cane growers and supportive of the nearly year-long agitation against agricultural reforms at the borders of the national capital.

“The price hike of ethanol will benefit farmers in 11 states and not just Uttar Pradesh,” Thakur said when asked whether the hike was timed with the assembly elections.

The government has been implementing Ethanol Blended Petrol (EBP) Programme wherein oil marketing companies sell petrol blended with ethanol up to 10%, in a bid to reduce crude imports.

The government aims to increase the doping of petrol with ethanol up to 20% by 2025.

Thakur said the ethanol blending with petrol has touched 8% in the 2020-21 marketing year (December-November) and is expected to reach 10% next year.

The decision of the CCEA is expected to provide price stability and remunerative prices for ethanol suppliers and also help sugar mills reduce the arrears of cane farmers.

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