Govt says ethanol costlier than petrol, can't cut price of blended fuel
This story was originally published at 09:14 IST on 13 August 2025
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MUMBAI – The Ministry of Petroleum and Natural Gas has clarified that ethanol-blended petrol is costlier than petrol, rejecting calls to make ethanol-blended fuel cheaper despite its lower-energy content. The demand for lower-priced ethanol is based on a report by Niti Ayog released in 2020-21 (Apr-Mar), when ethanol was cheaper than petrol, the ministry said in a release on Tuesday.
"Some concerns have been voiced that ethanol-blended petrol should be cheaper than non-blended fuel and that this cost advantage has not been passed on to the customers. They are referring to a NITI Aayog report. In 2020-21, when the report of NITI Aayog was prepared, ethanol was cheaper than petrol," the ministry said in the release.
The procurement price of ethanol has risen since the Niti Ayog report was released and currently, the weighted average price of ethanol is higher than that of petrol, the ministry said.
As of Jul. 31, the average procurement cost of ethanol for ethanol supply year 2024-25 (Nov-Oct) was INR 71.32 per litre, inclusive of transportation and goods and services tax, the ministry said. The price of C-heavy molasses-based ethanol has risen to INR 57.97 per litre in ethanol supply year 2024-25 from INR 46.66 in supply year 2021-22. Similarly, the price of maize-based ethanol has risen to INR 71.86 per litre from INR 52.92 per litre during the same period.
"Despite the increase in price of ethanol in comparison to petrol, the oil companies have not gone back on the ethanol blending mandate because the programme delivers on energy security, boosts farmers' incomes and environmental sustainability," the ministry said. End
Reported by Shreya Shetty
Edited by Avishek Dutta
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