India’s state-run oil marketing companies (OMCs) have excluded ethanol made from sugarcane juice, sugar syrup and B-heavy molasses from their latest procurement tender for the 2026-27 supply year, beginning November, to protect domestic sugar supplies amid rising prices and concerns over lower production.
The tender, issued by Bharat Petroleum Corporation Limited (BPCL) on October 16 on behalf of OMCs, seeks bids for around 11 billion litres of ethanol to support the country’s 20% ethanol-blending target in petrol.
The government has directed that sugar diversion for ethanol production be reduced to zero during the supply year. However, ethanol made from C-heavy molasses remains eligible.
The tender permits ethanol produced from maize, broken rice and surplus rice procured by the Food Corporation of India (FCI).
The procurement price for maize-based ethanol has been reduced to ₹68.86 per litre from ₹71.86, cutting the incentive by ₹3 per litre.
The policy shift comes amid concerns that poor rainfall in key sugar-producing states, including Maharashtra and Karnataka, could reduce sugarcane output and tighten supplies.
India, the world’s largest sugar consumer, is seeking to balance its ethanol-blending programme with the need to contain sugar prices and ensure adequate availability for domestic consumption.
