Pune: The sugar industry has raised demands for an urgent increase in ethanol prices by ₹5 to ₹7 per liter as the new ethanol production season begins.

This demand comes against the backdrop of stagnant prices over the last two seasons and the government's ambitious target of achieving 20% ethanol blending by 2025-26.

In the 2023-24 season, the central government maintained the previous year’s prices for ethanol derived from sugarcane juice (₹64.61 per liter) and B-heavy molasses (₹60.73 per liter).

The rate for C-heavy ethanol was slightly increased from ₹49.41 to ₹56.28 per liter. These prices allowed only 13% ethanol blending, resulting in 505 crore liters being procured for mixing with fuel.

For the current season, the government has invited tenders for 916 crore liters of ethanol, with Maharashtra allocated 42 crore liters of this quota. However, sugar mill operators and associations have expressed concerns that stagnant prices could discourage ethanol production.

While industrial-grade alcohol and maize-based ethanol fetch higher prices, sugarcane-based ethanol remains underpriced, leading to calls for immediate revision.

According to industry sources, a failure to address this issue could impact both farmers and ethanol manufacturers, potentially disrupting the 20% blending target.

The sugar industry has highlighted the environmental benefits, foreign exchange savings, and potential reduction in fuel costs from ethanol blending, emphasizing the need for better pricing policies.