Higher energy costs of Indian ethanol makers will be borne by oil retailers

The state fuel retailers in India are ready to offer monetary relief to sugar mills and other producers of ethanol to compensate for high energy costs. The objective behind this step from oil companies is to boost biofuel production.

The Indian government fixes the ethanol purchase prices for fuel retailers – Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp – every marketing year.

The three state fuel retailers have announced the ‘relief scheme’ for June 1 to Nov. 30. The fuel retailers have announced they will pay extra to ethanol manufacturers to compensate for high energy and power costs.

The companies will pay an additional 1,604 rupees ($20.62) per kilolitre for ethanol produced from sugar cane juice, and 1,493 rupees for B- heavy molasses and 1,179 rupees for ethanol produced from C-heavy molasses.

India has accelerated efforts to double ethanol blending with gasoline to 20% from the current 10% across the country from 2025/26.