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OMCs Raise Ethanol Procurement Price to Boost C-Heavy Molasses Utilization

This decision aims to make the production of ethanol from C-heavy molasses, a byproduct of sugar processing with low sugar content, more appealing for sugar mills.

December 30, 2023. By Abha Rustagi

In a strategic move to incentivize the production of ethanol from C-heavy molasses for blending with petrol, major public sector oil marketing companies (OMCs) – Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL), and Hindustan Petroleum Corporation (HPCL) – have raised the procurement price of such ethanol by INR 6.87 per litre, setting it at INR 56.28 per litre.

This decision aims to make the production of ethanol from C-heavy molasses, a byproduct of sugar processing with low sugar content, more appealing for sugar mills. 

Simultaneously, it seeks to discourage the use of high-sugar feedstocks. The move comes in response to reported dissatisfaction from the sugar industry regarding the previous procurement price of C-heavy molasses-based ethanol.

The government, in collaboration with OMCs, is taking proactive measures to ensure an attractive proposition for ethanol production from C-heavy molasses. 

The Petroleum Ministry, commenting on the development, stated, “In order to maximize ethanol production from C molasses route and improve the overall availability of ethanol for Ethanol Blended Petrol Programme, Public Sector Oil Marketing Companies announce an incentive of INR 6.87 per litre for ethanol from C heavy molasses. C molasses is a byproduct of a sugar factory, and its utilization for ethanol production is an effective way to promote green economy.”

Concerns about potential inadequate sugar production this season have prompted the government to prevent the diversion of high-sugar feedstocks, such as sugarcane juice, sugar syrup, and B-heavy molasses, for ethanol production. 

Balancing the need for sufficient sugar supply and maintaining sweetener prices, the government aims to secure the ethanol-petrol blending program against potential setbacks due to lower biofuel availability.
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