fuelling forward.This intervention seeks to reduce import dependence for energy requirements and give a boost to the agriculture sector
Oil marketing companies (OMCs) are expected to soon ask distilleries to supply an additional quantity of ethanol after they revised their orders. They have increased their orders to 1,050 crore litres from the already allocated 947 crore litres in the current ethanol supply year (ESY) that began from November 2024. Tenders for the additional quantity of about 30 crore litres may be floated soon.
Under the ethanol blending with petrol (EBP) programme, the government targets to achieve 18 per cent blending in the current ethanol supply year (ESY), which will end on October 31 and 20 per cent in ESY 2025-26. But, the EBP rate was more than 18.5 per cent during November 2024-April 2025. To achieve 20 per cent ethanol blending, India needs about 1,016 crore litres of ethanol annually and if OMCs get entire quantity this year, the blending may reach near the target set for the next year, sources said.
Should have asked more
The revision in quantity was necessitated following the decision to raise the rice for ethanol use from the Central Pool stock maintained by the Food Corporation of India (FCI). Industry sources said that the additional quantity OMCs should have asked for is not 50 crore litres but 130 crore litres based on 28 lakh tonnes (lt) rice allocated.
The Centre last month allowed 28 lt of rice in addition to the 24 lt allocated earlier for the ethanol programme, taking the total allotment to 52 lt for the 2024-25 ESY. The issue price of rice for ethanol remains at ₹22.50/kg. Out of 24 lt, distilleries lifted less than 10 lt as of May 8.
Based on a conversion of 470 litre ethanol produced from 1 tonne of FCI rice, distilleries can produce nearly 245 crore litres of ethanol from 52 lt quota, for which the government subsidy is estimated to be about ₹10,000 crore. The OMCs buy ethanol from the distilleries at government-set price of ₹58.50/litre if it is made from subsidised rice sold by FCI.
Published on June 5, 2025
