Overview
- Five state-run oil firms issued a joint tender on Friday for about 1,100 crore litres (≈11 billion litres) of denatured anhydrous ethanol for the Nov. 1, 2026–Oct. 31, 2027 supply year and said the government has ordered sugar diversion for ethanol to be set to zero.
- The tender excludes ethanol made from sugarcane juice, sugar, sugar syrup and B-heavy molasses and instead permits C-heavy molasses, maize, damaged food grains and surplus Food Corporation of India rice as eligible feedstocks.
- The procurement price for maize-based ethanol was lowered by cutting the incentive from ₹5.79 per litre to ₹2.79 per litre, reducing the maize procurement price from ₹71.86 to ₹68.86 per litre and squeezing producer margins.
- Suppliers must deliver ethanol produced at their own registered or approved distilleries with no third-party sourcing allowed, and OMCs said first-quarter allocations remain subject to pending court cases and may be revised without compensation.
- The policy keeps India’s E20 blending drive intact but shifts demand onto grain supply chains, which could raise pressure on maize and rice markets, affect distillery economics and change farmer income flows while protecting sugar stocks for domestic use.