Centre’s move to raise ethanol prices under EBP programme evokes mixed reaction from Maharashtra producers

Ethanol manufacturers from Maharashtra, mainly from the cooperative sector, have hailed the union cabinet’s approval for higher ethanol price derived from different sugarcane based raw materials under the EBP Programme for the forthcoming sugar season 2022-23, during ESY 2022-23 from December 1, 2022 to October 31, 2023.

As per the cabinet’s decision:

The price of ethanol from C heavy molasses route will be increased from Rs 46.66 per litre to Rs 49.41 per litre

The price of ethanol from B heavy molasses route will be increased from Rs 59.08 per litre to Rs 60.73 per litre

The price of ethanol from sugarcane juice/sugar/sugar syrup route will be increased from Rs.63.45 per litre to Rs.65.61 per litre

Additionally, GST and transportation charges will also be payable

However, a section of ethanol manufacturers said the government should have increased the prices of ethanol from B heavy molasses and ethanol from sugarcane juice/syrup, and not of the ethanol from C heavy molasses.

Ethanol is a by-product of sugar mills. Its production cycle is from December 1 to November 30. In 2020-21, Maharashtra produced 100.36 crore litres of ethanol through 78 establishments, as per a representative of the state cooperative sugar factories federation.

From December 2021, the state has so far produced 75.88 crore litres of ethanol, and it is expected to go up to 116 crore litres by November 30 this year, through 85 establishments.

The production is likely to go up to 130 to 140 crore litres next year. The establishments producing ethanol will also reach 90, from the present 85.

The Federation of Cooperative Sugar Factories in Maharashtra Managing Director, Sanjay Khatal, told The Free Press Journal, ‘’The Centre should not have increased the prices of ethanol from the C heavy molasses by Rs 2.75 per litre. Instead, the Centre should have increased the price of ethanol from B heavy molasses by Rs 2.50 per litre instead of the rise of Rs 1.65 per litre.

"In addition, the Centre should have hiked the price of ethanol from sugarcane juice/syrup by Rs 3.55 per litre instead of Rs 2.16 per litre. The source wise increase in prices was not in line with the mission mode programme of increasing ethanol supply and decreasing the sugar production.’’

He further said that in order to achieve the mission mode targets and enable the government to reduce crude oil imports by increasing the ethanol blending percentage to E20 by 2025, it was to necessary to ensure no hike in ethanol from C heavy, and instead restrict hikes only to ethanol from B heavy molasses and ethanol from sugarcane juries/syrup.

He said that the enormous increase in C heavy molasses rates will only pave the way for the unscrupulous elements in the sugar industry to create problems for the government.