The Centre on Friday defended its Ethanol Blended Petrol (EBP) Programme, saying petrol prices in Delhi could have touched around Rs 125 a litre during the recent surge in global crude oil prices if ethanol blending had not helped cushion costs.
Govt Rebuts FCI Rice Claims
The clarification comes after claims circulated that the government sold Food Corporation of India (FCI) rice worth Rs 37 per kg to distilleries at Rs 23 per kg, causing a loss of around Rs 10,000 crore, and that ethanol production is sustained through taxpayer subsidies.
Rejecting the allegations as misleading, the Ministry of Petroleum and Natural Gas said food security remains the first priority. According to the ministry, rice procured at the minimum support price is not diverted for ethanol production until requirements under the Public Distribution System, the National Food Security Act, welfare schemes and mandatory buffer stocks have been met.
It said only surplus stocks certified by the Department of Food and Public Distribution, along with damaged grain and broken rice that is unfit for consumption, are used for ethanol production.
No Special Treatment For Rice
The ministry also rejected claims that FCI rice receives preferential pricing, saying it is one of several approved feedstocks procured under the same government pricing framework.
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For the 2025-26 ethanol supply year, ethanol produced from maize was procured at Rs 71.86 a litre, followed by sugarcane juice or syrup at Rs 65.61, damaged foodgrains at Rs 64, B-heavy molasses at Rs 60.73, FCI rice at Rs 60.32 and C-heavy molasses at Rs 57.97.
According to the ministry, FCI rice accounted for 24.64% of ethanol production in 2025-26, up from 0.02% two years earlier, after surplus stocks became available beyond food security requirements.
Savings During Price Surge
The ministry said that when the Indian crude basket climbed to around $135 a barrel, petrol in Delhi would have cost about Rs 125 a litre without ethanol blending. Instead, retail prices remained at Rs 94.77 a litre because the ethanol component is procured at pre-agreed prices that are insulated from swings in global crude oil prices.
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It also highlighted broader benefits of the programme, saying ethanol blending has helped save more than Rs 1.97 lakh crore in foreign exchange, reduce crude oil imports by over 316 lakh metric tonnes, cut carbon dioxide emissions by more than 950 lakh metric tonnes, and generate over Rs 1.66 lakh crore in payments to farmers and distillers.
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