July 31, 2026: The Centre on Thursday defended its ambitious Ethanol Blended Petrol (EBP) Programme in the Lok Sabha, saying the initiative is aimed at strengthening India's energy security and supporting farmers rather than maximising profits for public sector oil marketing companies (OMCs).

The clarification came in response to a question on whether ethanol costs more than petrol and why the government continues to promote ethanol-blended fuel.

How much does ethanol cost?

For the current Ethanol Supply Year (November 2025 to October 2026), the government said OMCs are procuring ethanol at around ₹71 per litre, including GST and transportation.

The estimated procurement cost is:
•    IOC: ₹71.18 per litre 
•    HPCL: ₹71.10 per litre 
•    BPCL: ₹71.21 per litre

The weighted average ex-mill price across various feedstocks including sugarcane juice, B-heavy molasses, C-heavy molasses, damaged foodgrains, surplus FCI rice and maize is ₹66.61 per litre, excluding GST and transportation.

So why blend ethanol if it isn't the cheapest fuel?

According to the government, the objective of the EBP Programme is not to minimise procurement costs for oil companies.

"The procurement framework is designed to ensure adequate ethanol availability, provide remunerative prices to producers and support the agriculture sector; it is not intended to maximise OMC profits," Minister of State for Petroleum and Natural Gas Suresh Gopi told the Lok Sabha.

Instead, the Centre says ethanol blending serves multiple strategic objectives:
•    Reducing India's dependence on imported crude oil 
•    Protecting consumers from global oil price shocks 
•    Strengthening energy security 
•    Supporting farmers by creating demand for agricultural feedstocks 
•    Lowering vehicular emissions

(Source: Business Today)