New Delhi, Jun 27 (IANS): The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved a mechanism for procurement of ethanol by Oil Marketing Companies (OMCs) and hiked ex-mill price for ethanol derived out of C-heavy molasses to Rs 43.70 per litre.

Addressing the media here, Union Finance Minster Piyush Goyal said the move will have positive impact on the capability of sugar industry to pay farmers dues and the blending of 10 per cent ethanol with petroleum products.

"The move will encourage investment in the sector, which will also bring down imports of petroleum products," he said.

Goyal said the government had increased ethanol derived out of C-heavy molasses to Rs 43.70 per litre for the period of December 2018 to November 2019 from the prevailing prices of Rs 40.85 per litre.

Also, for the first time, the Cabinet has fixed ex-mill price of Rs 47.49 per litre for ethanol derived from B-heavy molasses.