Overview
- A joint quantity bid tender for about 1,100 crore litres of denatured anhydrous ethanol was issued by five state-run oil companies on Friday, October 16, for the supply year Nov. 1, 2026 to Oct. 31, 2027.
- The tender forbids offers of ethanol made from sugarcane juice, sugar, sugar syrup and B-heavy molasses and implements a government direction to set sugar diversion for ethanol to zero for 2026-27.
- OMCs will accept ethanol from alternative feedstocks including C-heavy molasses, maize, damaged foodgrains and surplus Food Corporation of India (FCI) rice under rules set out in the tender.
- The maize incentive was cut from ₹5.79 per litre to ₹2.79 per litre, lowering the maize-based procurement price from ₹71.86 to ₹68.86 per litre, and suppliers must deliver from their own registered or approved distilleries.
- First-quarter allocations are subject to ongoing court cases over OMC allocation methods, and the policy shift is likely to pressure grain demand, squeeze distillery margins, and influence short-term food and fuel markets.