Has India Increased Rice Allocation for Ethanol Production to Enhance Petrol Blending?
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Synopsis
In a significant move, India has ramped up rice allocation for ethanol production to 5.2 million tonnes, aiming to boost petrol blending and support farmers. Discover how this decision impacts oil imports and the sugar market.
Key Takeaways
- Food Ministry increases rice allocation for ethanol to 5.2 million tonnes.
- This aims to meet petrol blending targets and reduce oil imports.
- Excess rice stocks with FCI lead to better resource management.
- Expected to stabilize sugar prices by reducing sugarcane diversion.
- India is ahead in achieving 20% ethanol blending goal by 2025.
New Delhi, June 27 (NationPress) The Food Ministry has raised the allocation of rice for boosting ethanol production to 5.2 million tonnes. This decision is driven by the surplus stocks held by the Food Corporation of India (FCI), aiming to achieve the nation's petrol blending goals and lessen reliance on oil imports.
This strategy will minimize the need to redirect sugarcane towards alcohol production, consequently ensuring elevated sugar production levels, which helps keep the sweetener prices stable.
Currently, the FCI possesses approximately 60 million tonnes of rice and paddy, significantly exceeding the buffer requirement of 13.5 million tonnes. Such excess leads to storage challenges, complicating future crop procurement due to space limitations, as noted by a senior official.
Traditionally, grain-based ethanol manufacturers have relied heavily on maize, which caused a surge in maize prices, negatively affecting poultry farmers who depend on maize as feed. Increasing rice allocation for ethanol will also assist in stabilizing maize prices, according to industry experts.
Recently, Minister of Petroleum and Natural Gas Hardeep Singh Puri announced that E20 ethanol-blended petrol is now available at all retail outlets of public sector companies - Indian Oil, Bharat Petroleum, and Hindustan Petroleum - across the country.
The minister highlighted that India is set to achieve the 20 percent ethanol blending in petrol by early 2025, six years ahead of the original 2030 deadline, showcasing significant advancements in the nation's transition to cleaner fuels.
“This accomplishment not only diminishes the country's carbon emissions but also results in substantial monetary savings. We have saved over Rs 1 lakh crore and Rs 1.5 lakh crore in foreign exchange due to reduced import expenses, benefiting our farmers,” the minister remarked.
Point of View
This strategic increase in rice allocation for ethanol production reflects India's commitment to energy independence and sustainable practices. It aims to balance agricultural needs while achieving environmental goals, ultimately benefitting both the economy and farmers.
NationPress
27/06/2025
Frequently Asked Questions
Why has India increased rice allocation for ethanol?
India has increased rice allocation for ethanol to boost production to meet petrol blending targets and reduce oil import dependence.
How will this impact sugar prices?
This move will minimize the need for sugarcane diversion to alcohol production, helping to stabilize sugar prices.
What is the target blending percentage for ethanol in petrol?
India aims to achieve 20 percent ethanol blending in petrol by early 2025.
How does this decision affect maize prices?
Increasing rice for ethanol production is expected to stabilize maize prices, which have been rising due to their use in ethanol.
What are the environmental benefits of this initiative?
The initiative aims to lower carbon emissions and promote cleaner fuel alternatives in the country.
