State-run oil marketing companies (OMCs) have shut sugar-based ethanol out of their latest ethanol tender. BPCL issued the tender on 16 October for all the OMCs. It seeks about 11 billion litres for the year from November 2026 to October 2027. That volume supports India’s target of 20% ethanol in petrol (E20).
What the ethanol tender excludes
The tender seeks no offers for ethanol made from sugarcane juice, sugar, sugar syrup or B-heavy molasses. According to the document, the government has directed that sugar diversion for ethanol must fall to zero in 2026-27.
Instead, suppliers can offer ethanol from maize, damaged grains, surplus Food Corporation of India (FCI) rice and C-heavy molasses. Indian Oil, BPCL, HPCL, MRPL and Numaligarh Refinery share the procurement.
Lower price for maize ethanol
The OMCs also cut the maize incentive to ₹2.79 a litre from ₹5.79. As a result, the maize ethanol price falls to ₹68.86 a litre from ₹71.86. Meanwhile, the base rate for C-heavy molasses ethanol stands at ₹57.97 a litre.
Why the ethanol tender matters
Poor rain in Maharashtra and Karnataka has raised the risk of a smaller sugar crop. So the government wants to protect sugar supplies for food. However, the lower maize price could squeeze returns for grain-based distilleries just as the OMCs lean more on them.
Ethanol also trims India’s oil import bill. That matters while state oil firms already stretch fuel supplies, for example by selling biodiesel-blended diesel.
Next, watch the pre-bid meeting on 21 October and the bid deadline of 29 October.
