India bars sugar feedstocks from 11-billion-litre ethanol tender
Fuel policy now shifts demand from sugar toward food grains
Overview
India’s state-run oil companies want about 11 billion litres of for petrol from November 2026 through October 2027. The tender bars sugarcane juice, sugar, sugar syrup and . The government has set aside no sugar for after the blending programme raised demand and increased concerns about sugar supplies and prices. , maize, broken rice, damaged food grains and surplus rice held by the can still be used.
The change may protect sugar stocks and help consumers and sugar mills. But it could increase demand for maize and rice, putting pressure on supplies for food and animal feed. Reaching the will depend on whether enough grain is available. Distillers also say the maize payment will fall from Rs 5.79 to Rs 2.79 per litre. That could reduce their returns and make the target harder to meet.
Timeline
The 2026-27 tender leaves the 20% blending target dependent on alternative feedstocks
The oil companies continue to seek enough ethanol to support despite excluding sugarcane juice, sugar, sugar syrup and B-heavy molasses. , maize, broken rice, and surplus FCI rice must fill the gap. The tender establishes the policy direction, but confirmed bids and deliveries will determine whether the alternative supply can meet demand.
The new procurement rules shift ethanol sourcing from sugar-based feedstocks toward grains and C-heavy molasses
The 2026-27 tender excludes ethanol made from sugarcane juice, sugar, sugar syrup and , while allowing ethanol from maize, broken or damaged grains, and . This may increase competition for grain supplies, but the market impact depends on bids, deliveries and available stocks.
Ethanol industry representatives seek restoration of the higher maize incentive
The sought reconsideration of the cut from Rs 5.79 to Rs 2.79 per litre. The group argued that lower returns could reduce the attractiveness of . Its response highlights the risk that replacing excluded sugar ethanol may require stronger prices for alternative feedstocks.
The tender reduces the additional maize ethanol incentive from Rs 5.79 to Rs 2.79 per litre
The revised terms cut the extra incentive for maize-based ethanol by Rs 3 per litre. With the basic maize rate, the is reported at Rs 68.86 per litre, excluding . Distillers and industry representatives say the reduction could weaken margins and affect the viability of grain-based supply.
The oil companies shift eligible ethanol supply toward maize, broken rice and surplus FCI rice
The tender permits ethanol made from maize, broken rice, and procured by the . Listed basic prices include Rs 66.07 per litre for maize, Rs 64 for and Rs 60.32 for surplus FCI rice. The new mix makes grain availability, storage and competing food and feed demand more important to blending.
The tender keeps C-heavy molasses eligible for ethanol production
remains an approved feedstock even though B-heavy molasses is excluded. The tender lists a of Rs 57.97 per litre for ethanol. The distinction allows mills to continue using a lower-sugar byproduct while retaining more sugar for food markets.
The oil companies exclude sugarcane juice, sugar, sugar syrup and B-heavy molasses
The quantity bid excludes ethanol made from sugarcane juice, sugar, sugar syrup and . The exclusion converts the zero-diversion direction into procurement rules for fuel suppliers. Sugar mills can no longer rely on these for the tendered volumes.
The government sets sugar diversion for ethanol at zero for 2026-27
The tender document states that government directions require for ethanol to be reduced to zero during the 2026-27 . The decision removes the previously available sugar-linked route from the main procurement plan. It makes protecting sugar stocks a central condition of the .
Indian Oil, Bharat Petroleum and Hindustan Petroleum invite bids for 11 billion litres of ethanol
The state-run oil marketing companies issued a for about 1,100 , or 11 billion litres, for the beginning November 2026. The procurement is intended to support petrol blending through October 2027. The divides deliveries across four .
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India broadens ethanol policy and procurement beyond sugar-based feedstocks
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