Distilleries Unhappy with Price Cut for Maize-Based Ethanol

New Delhi. The Central Government has, on one hand, banned the use of sugarcane juice, sugar syrup, and B-heavy molasses for ethanol production—a move that will increase challenges for distilleries engaged in such production. On the other hand, it has reduced the procurement price of maize-based ethanol by Rs 3 per litre. This has left grain-based distilleries dissatisfied and unhappy, as the government's decision will result in financial losses for them.

Interestingly, the sugar industry has welcomed the reduction in the procurement price of maize-based ethanol. At the same time, the industry has cautioned the government that granting special priority or incentives to any specific type of ethanol plant would create discrimination; therefore, all plants should be treated equally.

It is noteworthy that this is the first time since the inception of the Ethanol Blending Programme that Oil Marketing Companies (OMCs) have reduced the procurement price for maize-based ethanol. Although the procurement price was set at a lower level during the initial phase of the 2022-23 marketing season, it was subsequently increased in a phased manner. Now, a decision has been taken to reduce it slightly.

Meanwhile, for the 2026-27 season, the procurement price for ethanol produced from C-heavy molasses has been maintained at Rs 57.97 per litre, and the price for ethanol produced from damaged grain (broken rice) remains unchanged at Rs 64 per litre; however, the price for maize-based ethanol has been reduced.