Recommendation to Review Ethanol Prices

07-May-2026 08:10 PM

New Delhi: Following the government's decision to hike the Fair and Remunerative Price (FRP) for sugarcane by ₹10—fixing it at ₹365 per quintal for the 2026-27 marketing season (October-September)—the Commission for Agricultural Costs and Prices (CACP) has recommended a review of the prices of ethanol produced from sugarcane-based inputs, suggesting a proportionate increase in the same.

The Commission notes that the rise in the sugarcane FRP will inevitably drive up the production costs for both sugar and ethanol; therefore, the selling price of ethanol warrants a review. An interesting fact is that the increase in the sugarcane FRP itself was implemented based on the Commission's recommendation.

Additionally, the Commission has suggested that the government explore the feasibility of establishing a dual-pricing mechanism for sugar and assess its potential profitability. The Commission argues that an evaluation should be conducted to determine the potential impact and consequences of fixing separate prices for sugar intended for domestic consumption versus that designated for industrial or commercial use.

If such a measure proves to be economically viable, it could be implemented. While this move could offer relief to both the sugar industry and general consumers, it may simultaneously increase the operational burden on the industry.