New Delhi, Dec 7 (IANS): The Central government on Thursday directed sugar mills to not use sugarcane juice for producing ethanol in 2023-2024 as it is worried that the country’s sugar output may fall which would lead to a spike in prices.

Ethanol is supplied to oil marketing companies such as Indian Oil, Bharat Petroleum and Hindustan Petroleum for blending with petrol.

The government notification states that sugar mills can continue to produce ethanol from B-Heavy molasses, which is a by-product in sugar production, to meet the requirement for blending with petrol.

''In exercise of powers conferred under clause 4 & 5 of the Sugar (Control) Order 1966, it is directed to all sugar mills and distilleries not to use sugarcane juice/sugar syrup for ethanol in ESY (ethanol supply year) 2023-24 with immediate effect," an official notification said.

"Supply of ethanol from existing offers received by Oil Marketing Companies (OMCs) from B-Heavy molasses will continue,'' the Food Ministry notification states.

The Centre had announced a Rs 10 per quintal hike in the minimum price of sugarcane to Rs 315 per quintal to increase returns for farmers in the 2023-24 season which started in October.