To ensure the achievement of the 12 per cent blending target this year, the government is believed to have raised prices of ethanol made from rice and maize after the Food Corporation of India (FCI) halted rice supply for ethanol production. The objective is to support distilleries in restarting production. However the notification is yet to be released.
As per media report, purchase price of ethanol by oil marketing companies (OMCs) has been increased by ₹4.75/litre to ₹60.29/litre when the biofuel is made from damaged/broken rice (purchased from open market) for remaining part of current ethanol year (until Oct 31, 2023). Also the new rate of ethanol will be ₹62.36/litre when it is to be produced from maize, an increase of ₹6.01/litre.
The steps are believed to have been taken after the closure of distilleries due to the halting of the supply of rice for ethanol production by FCI.
The OMCs have achieved 11.77% blending till June 23. With several distilleries halting operations in July after FCI stopped the supply of rice to them, the percentage of blending is likely to come down.