The government is planning to more than double ethanol production and increase blending of ethanol with petrol to cut oil imports. It plans to increase the ethanol production capacity to 9 billion litres from 3.55 billion litres in a couple of years, said a consumer affairs, food and public distribution ministry official. The Ministry given its in-principle approval to 362 new plants in sugar mills for adding capacity of 5.5 billion litres. This will add the investment of Rs 18,000 crore,” said the official, who did not wish to be identified. The increased capacity will help to reach the government’s target of 10% ethanol blending by 2022. This is likely to avoid the country’s oil imports by 2 million tonnes annually and cut the oil import bill by Rs 7,000 crore. Ethanol can be produced directly from cane juice as well as from B-grade and C-grade molasses. The cost of ethanol from sugarcane juice has been fixed at Rs 59.48 per liter while ethanol separated from C-grade molasses gets Rs 43.75 a liter and that from B-grade molasses gets Rs 54.27 a liter. The authority said the nation needs at any rate 4.25 billion liters of ethanol to meet the 10% mixing objective. In 2019, 1.91 billion litres of ethanol was blended with petrol, achieving just 5.5% blending,” said the official. “This year, so far oil companies have signed up contracts for 1.4 billion litres and contracts of additional 310 million litres are in the pipeline. There is demand of 5.11 billion litres from oil companies. Since there is around 21% dip in production, the target of ethanol blending could reach 4.5% only.” The govt is focusing to redirect 700,000-800,000 tons of surplus sugar in every one of the following two years for ethanol creation to maximise profitability of sugar entities,according to officials.