OMCs Issue Tender for 124 Crore Litres of Ethanol from Rice and C Heavy Molasses.

Domestic oil marketing companies (OMCs) have issued a tender for the procurement of 124 crore litres of ethanol for the current ethanol supply year (ESY), which ends in October 2025. This tender is under Cycle 3 (C3) of the ESY 2024-25, with a focus on ethanol produced from Food Corporation of India’s (FCI) subsidised rice and C Heavy Molasses (CHM).

The government has capped the maximum quota for rice sales to ethanol distilleries at 24 lakh tonnes under the ethanol blended petrol (EBP) programme, with the price of rice set at ₹22.50 per kg. This ethanol will be used for Q2 (February-April 2025) and Q3 (May-July 2025) of the 2024-25 period, with the OMCs anticipating a demand of 70.86 crore litres in Q2 and 53.06 crore litres in Q3.

This marks part of an ongoing effort to blend 18% ethanol in petrol during the 2024-25 ethanol supply year. The OMCs have already signed contracts for 930 crore litres of ethanol, including 593 crore litres from food grains, 196 crore litres from sugarcane juice, 132 crore litres from BHM, and 9 crore litres from CHM.

The reserve price for rice allocated for ethanol production has been fixed at ₹2,250 per quintal (ex-FCI godown), with the rates valid until June 30, 2025. The basic ethanol rate from FCI rice will be ₹58.50 per litre, with transportation charges and GST payable separately.

On January 17, the government reduced the price of rice for ethanol production to ₹22.50 per kg, subsidizing ₹17.25 per kg from the public exchequer. Additionally, the Union Cabinet approved a higher ex-mill price for ethanol derived from CHM at ₹57.97 per litre, an increase of ₹1.69 for the 2024-25 period. Prices for ethanol derived from BHM and sugarcane juice remained unchanged at ₹60.73 and ₹65.61 per litre, respectively.

The cumulative ethanol blending in petrol for ESY 2023-24 reached 14.6%, with OMC PSUs dispensing E20 fuel (20% ethanol-blended petrol) at over 17,400 retail outlets. The total ethanol supply during ESY 2023-24 was approximately 672.5 crore litres, including 231.58 crore litres from sugar mills and 707.4 crore litres blended under the EBP programme.

HBL