NEW DELHI: India has excluded ethanol produced from sugarcane juice, sugar syrup and B heavy molasses from its latest petrol blending procurement tender for the 2026 to 27 supply year, as the government seeks to protect domestic sugar availability while maintaining its nationwide ethanol blending programme.
The tender, issued on October 16 by Bharat Petroleum Corporation Ltd (BPCL) on behalf of state run oil marketing companies, invites bids for approximately 11 billion litres of ethanol for the supply period from November 2026 to October 2027. The procurement is aimed at meeting the country’s requirement for blending 20 per cent ethanol with petrol.
The tender states that the government has directed that the diversion of sugar for ethanol production be reduced to zero during the 2026 to 27 supply year. Accordingly, bids for ethanol manufactured from sugarcane juice, sugar, sugar syrup and B heavy molasses have not been invited under the latest procurement process.
Instead, oil marketing companies will accept ethanol produced from maize, broken rice, surplus rice procured by the Food Corporation of India and C heavy molasses.
The procurement terms have also reduced the incentive offered for maize based ethanol. The price has been lowered to Rs 68.86 per litre from Rs 71.86 per litre, reducing the additional payment for producers supplying ethanol from maize.
The policy shift comes amid concerns over domestic sugar availability and prices following poor rainfall in key sugar producing states, including Maharashtra and Karnataka, which could affect output.
India is the world’s largest sugar consumer and has expanded ethanol blending to reduce its dependence on imported crude oil and lower emissions from petrol consumption. However, using sugarcane and sugar for fuel production can compete with supplies intended for food consumption, particularly when domestic production faces pressure.
The exclusion of sugar based feedstocks is expected to increase reliance on grain based ethanol and C heavy molasses. Feedstock availability, production capacity and procurement prices will therefore remain important factors in meeting blending targets.
The latest move highlights the government’s effort to balance energy security with the need to maintain sufficient sugar supplies and manage domestic prices while continuing the E20 petrol programme.
