With Uttar Pradesh assembly elections just months away, the central government on Wednesday cleared a hike in ethanol price by up to 80 paise a litre, a step which will benefit sugarcane farmers as prices of cane-based ethanol will rise.
The hike will push up the price of sugarcane-based ethanol to Rs 63.45 a litre from Rs 62.65, official sources said.
The move was cleared by the Cabinet Committee on Economic Affairs (CCEA) in its meeting held earlier in the day.
Sugarcane is one of the key crops in Uttar Pradesh, whose western part is a major cane growing region. The move is likely to send a positive signal among cane farmers of the region.
The new prices of ethanol will come into effect from December 1, Minister for Information and Broadcasting Anurag Thakur said, while speaking to media persons.
The rate for ethanol from B-heavy molasses and C-heavy molasses has also been hiked by Rs 2.55 per litre and Rs 2.12 per litre, respectively.
The price of ethanol from B-heavy molasses has been set at Rs 59.08 per litre from Rs 57.61 per litre earlier, and the price of ethanol from C-heavy molasses has been set at B-heavy molasses Rs 46.66 per litre from Rs 44.54 per litre.
Centre had last hiked the price of ethanol extracted from sugarcane for blending in petrol by up to Rs 3.34 in October 2020, to further push the programme, as it has benefitted farmers and also helped in reducing the oil import bill.