More Stories

Informist, Wednesday, Jan. 29, 2025

 

NEW DELHI – Oil marketing companies have invited bids for the supply of 1.24 billion litres of ethanol made from C-heavy molasses and surplus rice from the Food Corp. of India, according to a tender document released Wednesday. Distillers have to supply the biofuel for the second quarter (Feb-Apr) and third quarter (May-Jul) of 2024-25 ethanol supply year ending October, it added. Oil companies buy ethanol to achieve their blending targets. 

 

Oil companies will buy ethanol made from FCI surplus rice at INR 58.50 per litre, and C-heavy molasses at INR 57.97 per litre, according to the tender. Earlier on Wednesday, the Union Cabinet hiked the price of ethanol made from C-heavy molasses by 3% from INR 56.28 per litre. Ethanol is made from starch containing feedstocks like molasses and grains. 

 

While the government fixes rates of ethanol made from molasses-based feedstocks, oil companies decide the rates of ethanol sources from grain-based feeds. Last year, FCI did not sell rice to distillers as the government asked the corporation to halt rice supply for fuel production amid concerns of lower rice production. 

 

Though the government removed the ban on FCI rice supply for ethanol production in August, distillers found FCI rice rates unviable. To attract distillers and offload stocks, the government reduced the rice price to INR 22.5 per kg, from INR 28 per kg. 

 

The market expects robust offtake of FCI rice by distillers amid firm demand for grain-based feedstocks to make ethanol. So far, state oil marketing companies have floated two ethanol supply tenders and grain-based distilleries have bagged most orders. Of the orders for 9.30 billion litres of ethanol, grain-based units will supply nearly 64%, and sugar-based distillers 36.3%.

 

According to the tender, distillers can commence supply from Feb. 15 for the Feb-Apr quarter and May. 1 for the May-Jul quarter. The government has set a target of achieving 20% blending by 2025-26 (Nov-Oct) to reduce dependence on crude oil and save foreign exchange. During Nov-Dec, oil companies bought 1.09 billion litres of ethanol and achieved 16.4% blending. End

 

Reported by Afra Abubacker

Edited by Saji George Titus

 

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (22) 6985-4000 /+91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2025. All rights reserved.