Sugar Industry Urges Central Government to Raise Ethanol Prices in Line with Sugarcane FRP
29-Apr-2025 03:42 PM
Meerut. The sugar industry has voiced concern over the central government’s failure to revise ethanol prices in line with the Fair and Remunerative Price (FRP) of sugarcane, despite a policy framework that mandates such adjustments. This has led to growing dissatisfaction among ethanol manufacturers, who say they are increasingly discouraged by the government's inaction.
According to industry sources, the Union Cabinet had earlier approved a formula to ensure that ethanol prices would be revised annually, in proportion to changes in the FRP of sugarcane.
This system was designed to maintain transparency and cost parity, and was implemented consistently from 2014–15 through 2022–23. However, the formula has been ignored for two consecutive marketing years—2023–24 and 2024–25.
During this period, the FRP of sugarcane has increased by 11.5%, from ₹305 to ₹340 per quintal. Despite this, the price of ethanol has remained unchanged, with no upward revision. Currently, ethanol derived from:
Sugarcane juice is priced at ₹65.60 per litre, and
B-heavy molasses at ₹60.70 per litre.
The government is expected to raise the FRP to ₹355 per quintal for the 2025–26 season, but the industry remains uncertain about whether ethanol prices will follow suit.
The Director General of the Indian Sugar and Bio-Energy Manufacturers Association (ISMA) stated that the lack of continuity in the pricing mechanism is affecting business confidence.
“The government's blending target of 30% ethanol in petrol by 2030 is ambitious, but this kind of inconsistency is discouraging for manufacturers who need pricing clarity to invest in production capacity,” he added.
The current ethanol marketing season began in November 2024 and will run until October 2025. However, with stable ethanol prices and rising input costs, industry leaders warn that without timely intervention, India's ethanol blending targets may be at risk.