India Excludes Sugar-Based Ethanol From New 2026-27 Fuel Tender

India has kept sugar-based ethanol out of its latest fuel supply tender for the 2026-27 period. The government told state-run oil marketing companies to make sure no sugar gets diverted for ethanol production during this time. Because of this, the tender issued on October 16 invites no bids for ethanol made from sugarcane juice, sugar syrup, or B-heavy molasses.

Tender Details

Three state fuel firms—Indian Oil, Bharat Petroleum, and Hindustan Petroleum—want to buy 11 billion litres of ethanol for the supply year starting in November 2026. Distillers can still send in bids for ethanol made from corn, broken rice, and surplus FCI rice. But corn-based ethanol pays less now because the incentive dropped by Rs 3 per litre to Rs 2.79 per litre, bringing the total procurement price down from Rs 71.86 to Rs 68.86 per litre.

Context

India consumes more sugar than any other country and has used surplus sugar for years to help run its ethanol-blending programme, which aims to cut down oil imports and vehicle emissions. Weaker rains in states like Maharashtra and Karnataka raised doubts about local sugar crops, and the government is now trying to keep local prices under control.