Ethanol Maker BCL Industries Shares Rise as Government Mulls Ethanol Price Hike

Ethanol prices, fixed by the government, have remained unchanged since the 2022-23 season (November-October).

Shares of BCL Industries, one of the largest grain-based manufacturers of Extra Neutral Alcohol (ENA) and ethanol in the country, surged around 4 per cent on Monday. The surge in price comes amid reports that the government is mulling ethanol price hike.

The counter opened in the green at Rs 60.50 and gained further to touch the high of Rs 62.69 – a gain of over 4 per cent from previous close of Rs 60.04. Govt mulls ethanol price hike for 2024-25 season
The government is considering a proposal to increase ethanol prices for the season starting November 2024, while also pushing for diversification of feedstocks, as it aims to achieve the 20 per cent blending target by 2025-26, sources said.

A committee headed by a joint secretary from the petroleum ministry has already held one round of discussions on the proposal. The revision of ethanol prices will be based on the fair and remunerative price of sugarcane, they added.

“The price revision is being considered on priority to incentivize production and meet our blending goals,” a source said, requesting anonymity. Last week, Cooperation Minister Amit Shah called for a multi-dimensional approach to biofuel manufacturing and affirmed that India would achieve its 20 per cent ethanol blending target by 2025-26, ahead of the original 2030 deadline.

Ethanol prices, fixed by the government, have remained unchanged since the 2022-23 season (November-October). Currently, ethanol produced from cane juice is priced at Rs 65.61 per litre, while rates for ethanol from B-Heavy and C-Heavy molasses stood at Rs 60.73 and Rs 56.28 per litre, respectively.

The government sees the ethanol blending program as a key to meeting its green energy commitments and improving the financial health of sugar mills, the sources added. As per official data, ethanol blending in India has reached 13.3 per cent by July of the current season, up from 12.6 per cent during the 2022-23 season.

(Disclaimer: The information provided in this article is for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.)