India Excludes Sugar-Based Ethanol From New Tender And Cuts Maize Price

State-run oil companies have banned ethanol made from sugarcane juice, sugar syrup, and B-heavy molasses in their latest procurement tender for the 2026-27 supply year.

Tender Details

Issued on October 16 by Bharat Petroleum Corporation Limited on behalf of oil marketing companies, the tender asks for about 11 billion litres of ethanol to mix 20% ethanol in petrol. The document states that the government ordered sugar diversion for ethanol to drop to zero for this supply year. The tender also lowers the procurement price for maize-based ethanol from ₹71.86 to ₹68.86 per litre.

Allowed Materials

While sugarcane options are blocked, the tender accepts bids for ethanol made from maize, broken rice, surplus rice from the Food Corporation of India, and C-heavy molasses. The drop in the maize price incentive reduces returns for grain ethanol producers, making alternative raw materials more important.

Context

Poor rainfall in major sugar states like Maharashtra and Karnataka raised fears of lower output, leading to worries over local sugar availability and rising prices. India is the world's biggest sugar consumer and uses the petrol blending programme to cut crude oil imports and vehicle emissions, but must balance energy goals with food supply needs.