The Government on Wednesday hiked the price of ethanol, used for blending in petrol, as it looked to raise the doping quantity to cut India's reliance on imported oil. 

The Cabinet Committee on Economic Affairs (CCEA), headed by Prime Minister Narendra Modi, raised the price of ethanol from all three varieties, Oil Minister Hardeep Singh Puri told reporters here.

The CCEA also approved a subsidy of `51,875 crore for phosphatic and potassic (P&K) fertilisers for the second half of 2022-23 as part of efforts to provide affordable soil nutrients to farmers.

 The price of ethanol extracted from sugarcane juice was increased to `65.61 per litre, from the current `63.45 per litre for the supply year beginning December 2022.   

The rate for ethanol from the C-heavy molasses route has been increased to `49.41 per litre, from `46.66 per litre currently, and that of ethanol from the B-heavy route to `60.73 per litre, from `59.08 per litre, said Puri.  At present, 10 per cent ethanol is blended in petrol (10 per cent ethanol, 90 per cent petrol) and the government is looking to double this quantity by 2024-25.  "We have saved about `40,000 crore in forex outgo from 10 per cent blending besides benefiting the farmers," he said, adding a pilot to start E-20 (petrol with 20 per cent ethanol) will start from April 2023 at select petrol pumps.  The use of ethanol, extracted from sugarcane as well as broken rice and other agri produce, will help the world's third-largest oil consumer and importing country cut its reliance on overseas shipments.

 India currently is 85 per cent dependent on imports for meeting its oil needs.  As much as 452 crore litre of ethanol was blended in petrol during the supply year ending November 30, 2022. For the next year, 540 crore litres procurement is being targeted with an eye to start larger volumes of blending. Government expects 12 per cent ethanol blending in petrol in 2023 at most places.

 Puri said from 2023, the supply year will change from November to October instead of the present practice of considering the ethanol supply year from December to November. 

This is to avoid sugar mills from holding ethanol stocks in anticipation of price revision.  So, the 540 crore litres of ethanol procurement is the target for 11 months (December 2022 to October 2023), he said.  The CCEA approved nutrient-based subsidy (NBS) rates for P&K fertilisers for 2022-23 rabi season, an official statement said.  The CCEA has approved a subsidy of `98.02 per kg for nitrogen (N), `66.93 per kg for phosphorus (P), `23.65 per kg for potash (K) and `6.12 per kg for sulphur (S), it added.

 "Subsidy approved by the Cabinet for the NBS Rabi-2022 (from 01.10.2022 to 31.03.2023) will be `51,875 crore including support for indigenous fertiliser (SSP) through freight subsidy. This will enable smooth availability of all P&K fertilisers to farmers during the rabi season at subsidized prices and support the agriculture sector, it said.