In a significant move to boost the ethanol industry, Oil Marketing Companies (OMCs) including Indian Oil, Bharat Petroleum, Hindustan Petroleum, and Mangalore Refinery and Petrochemicals have jointly announced a lucrative incentive of ₹6.87 per litre for ethanol derived from C-heavy molasses during the Ethanol Supply Year (ESY) 2023-24. This decision aims to promote the production and supply of ethanol from C-Heavy Molasses, a crucial component in the ethanol manufacturing process.
The incentive is set to be an addition to the existing ESY procurement price of ₹49.41 per litre, providing a substantial boost to producers in this sector. Sugar industry insiders have informed CNBC-TV18 that the government is expected to finalize the prices for ethanol produced from B-heavy molasses and juice in the coming days. Additionally, there are indications that the government may allocate additional ethanol from C-heavy to compensate for lapsed allocations of juice or B-heavy ethanol.
Furthermore, there is speculation that the government might consider converting the current revised allocations of juice or B-heavy ethanol for supply as C-heavy. According to a statement by the OMCs, the incentive will be disbursed by the respective companies through a credit note or by incorporating it directly into the purchase order. Importantly, the incentive is applicable to all supplies of ethanol from C-heavy molasses made in the previous year.
However, it’s worth noting that the incentive will not be applicable to quantities supplied in ESY 2023-24 against allocations or purchase orders from ESY 2022-23. The Department of Food and Public Distribution, in a communication dated December 15, has urged molasses-based distilleries to prioritize the production of ethanol from C-heavy molasses, aligning with the government’s push for a more sustainable and ethanol-rich energy landscape.
