The Indian government Monday raised the price of ethanol for blending with fuel at Rs 27 per litre from existing Rs 21.50 per litre.
"The Cabinet Committee on Economic Affairs has approved the hike in price of ethanol to Rs 27 per litre from existing price of Rs 21.50 per litre for five per cent mandatory blending with fuel," a source said.
A Group of Ministers (GoM) has recently reaffirmed Rs 27 per litre price for ethanol to be paid by the oil marketing companies to the sugar companies.
The chemical industry and oil marketing companies had demanded a much lower price in line with prevailing domestic price of around Rs 18 per litre.
The two primary consumers of molasses-based alcohol are the potable liquor sector and chemical producers.