New Delhi: In a recent development, manufacturers of grain-based ethanol have engaged with Prime Minister Narendra Modi and the Ministry of Petroleum and Natural Gas, appealing for swift intervention to instruct oil-marketing companies (OMCs) to raise the procurement prices for ethanol derived from damaged food-grain (DFG) and maize, a business daily reported. The proposed rates for the Ethanol Supply Year (ESY) 2023-24, which commenced from November, stand at INR 69.54 per litre for DFG-based ethanol and INR 76.8 per litre for maize-based ethanol.
The primary objective behind this initiative is to ensure the sustainability of a consistent ethanol supply. In the previous ESY (2022-23), OMCs had fixed the procurement prices at INR 64 per litre for DFG-based ethanol and INR 66.07 per litre for maize-based ethanol. This call for an increase in procurement prices is particularly crucial as the majority of ethanol production from grain-based sources heavily relies on DFG and maize. This shift became imperative due to the discontinuation of surplus rice supplies from the Food Corporation of India (FCI) at fixed rates.
In the Indian ethanol market, the predominant sources are sugarcane and grains. The appeal for a price adjustment comes at a time when the government has yet to announce the procurement price for sugarcanederived ethanol, even though the season began in November. This development underscores the industry’s concerns and its proactive approach to maintain a stable ethanol supply chain
In August of this year, oil marketing companies (OMCs) witnessed a drop in the percentage of ethanol blended with petrol, falling from 11.77% in July to 11.72%. This decline was primarily attributed to the scarcity of vital feedstock, particularly rice. The Ministry of Petroleum and Natural Gas (MoPNG) pinpointed the reduction in blending to the discontinuation of rice supply by the Food Corporation of India (FCI) from July 2023. This interruption in the rice supply chain had far-reaching consequences, as it triggered a surge in the prices of key feedstock commodities like domestic food grains (DFG) and maize.