New Delhi: The Centre has approved an additional 28 lakh tonnes of rice for ethanol production, raising the total allocation to 52 lakh tonnes for the ethanol supply year 2024–25, which began in November 2024. The issue price of rice for distilleries remains unchanged at ₹22.50 per kg, despite the increased supply, reports The Hindu Businessline.
The Food Corporation of India (FCI) had earlier allocated 24 lakh tonnes, of which less than 10 lakh tonnes have been lifted by ethanol producers so far. The additional allocation brings the total quantity available for ethanol production to 52 lakh tonnes for the period ending October 31, 2025.
In an official communication last week, the Food Ministry said the decision was made after evaluating the availability of raw materials and the potential ethanol yield from FCI rice.
If fully utilised, the 52 lakh tonnes of rice could yield around 245 crore litres of ethanol, assuming a conversion rate of 470 litres per tonne. The estimated government subsidy for this allocation is around ₹10,000 crore.
Based on the estimated economic cost of rice at ₹41.73 per kg for 2025-26, and the fixed issue price of ₹22.50, the subsidy per kilogram of rice is ₹19.23. Distilleries are expected to pay ₹11,700 crore to FCI for the rice and earn about ₹14,300 crore from selling ethanol to oil marketing companies at the government-set rate of ₹58.50 per litre.
The move supports the government’s ethanol blending programme (EBP), which aims to reduce dependence on imported fuel. The current ethanol supply year targets an 18% blending rate, and has already exceeded it, reaching over 18.5% during November 2024 to April 2025. The goal is to achieve 20% blending in the following supply year, 2025–26.
