State fuel retailers have raised the purchase price of ethanol made from maize by Rs 5.79 a litre to Rs 71.86 rupees per litre to encourage its production for blending with gasoline, according to media reports. 

India is promoting use of maize as an alternative to sugar to boost ethanol production and ensure sufficient supply of the sweetener in the market. 

In December, India had directed sugar mills not to use cane juice to produce ethanol as the country’s sugar production is expected to decline in the 2023-24 marketing year that began in October. 

Last week, State fuel retailers had raised procurement price for ethanol made from C-heavy molasses, a cane by-product that has hardly any sugar content in it, by Rs 8.87 per litre. 

Ethanol makes up about 10.20 per cent of petrol sold in India, and the government aims to raise blending to 20 per cent by 2025. 

The Indian Sugar Mills Association, a producers’ body, had said last month that India’s sugar production was likely to fall to 32.5 million tonnes in the 2023-24 marketing year, down from its previous estimate of 33.7 million tonnes. 

In the preceding marketing year, India was estimated to have produced 36.6 million tonnes of sugar.