Union Cabinet has approved over 25 % hike in the price of ethanol produced directly from sugarcane juice for blending in petrol.
About:
Centre has hiked ethanol prices, with a special incentive for ethanol directly produced from 100% sugarcane juice, in a dual bid to reduce both surplus sugar production and fuel import bill.
The ethanol produced from sugar is blended with petrol.
Background:
Surplus sugar production has been depressing sugar prices. Record production of more than 31 million tonnes this year is far higher than domestic consumption rates of 25 million tonnes.
As a result, sugar mills have struggled to pay their dues to cane farmers, and despite various government measures to improve liquidity, the arrears to farmers stand at more than Rs. 13,000 crore.
Paying remunerative prices to ethanol suppliers will help in reduction of cane farmers’ arrears, in the process contributing to minimising the difficulty of sugarcane farmers.
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